Provincial official turnover and bank loans

Chunfang Cao, Yizhe Dong, Wenxuan Hou, Yue Liu and Xianhang Qian

Pacific-Basin Finance Journal, 2019, vol. 57, issue C

Abstract: Based on the turnover data of provincial party committee secretaries in China between 2000 and 2008, we find that the loan increment of local SOEs (state-owned enterprises) decreases by 18.9% in turnover years. We also document increased efficiency of long-term loans in turnover years. The effects of provincial leader turnover on bank loans only exist for local SOEs in eastern regions and more marketized provinces. Local officials have less of a political incentive to exert influence on bank credit allocation in turnover years, and therefore banks act as more effective intermediaries in optimizing credit allocation and improving the efficiency of loans.

Keywords: Political turnover; Bank loans; Credit allocation efficiency; Local SOEs (search for similar items in EconPapers)
JEL-codes: G30 G31 G38 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:pacfin:v:57:y:2019:i:c:s0927538x19300496

DOI: 10.1016/j.pacfin.2019.101202

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