Lending for Growth? An Analysis of State-Owned Banks in China

Fredrik Andersson, Katarzyna Burzynska () and Sonja Opper ()
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Katarzyna Burzynska: Department of Economics, Lund University, Postal: Department of Economics, School of Economics and Management, Lund University, Box 7082, S-220 07 Lund, Sweden, http://www.nek.lu.se/en/contact
Sonja Opper: Department of Economics, Lund University, Postal: Department of Economics, School of Economics and Management, Lund University, Box 7082, S-220 07 Lund, Sweden, http://www.nek.lu.se/en/contact

No 2013:19, Working Papers from Lund University, Department of Economics

Abstract: This paper provides the first comparative analysis of different types of publicly owned banks operating in China between 1997 and 2008. Using principal component analysis and Granger-causality tests, this study shows that China’s state-owned commercial banks and rural credit cooperatives did not promote GDP growth during the observation period. State-owned commercial banks even had a negative effect on growth in the manufacturing sector. By contrast, state policy banks and joint stock commercial banks did promote domestic growth. China’s experience presents a more nuanced picture of state banking that goes beyond the role of ownership to consider functional and institutional differences.

Keywords: China; Banking sector; Economic growth (search for similar items in EconPapers)
JEL-codes: G21 O16 P30 (search for similar items in EconPapers)
Pages: 42 pages
Date: 2013-06-17
New Economics Papers: this item is included in nep-ban, nep-cfn, nep-cna, nep-cwa, nep-fdg and nep-tra
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