Access to Credit and Investment Decisions of Small and Medium-Sized Enterprises in China: Size Matters

Paulo Regis

No 2015-01, RIEI Working Papers from Xi'an Jiaotong-Liverpool University, Research Institute for Economic Integration

Abstract: Financial constraints are common in developing countries where financial systems are underdeveloped. In China, firms report that access to finance is the most important obstacle in the business environment. This is related to firms that fail to gain access to the credit market. We examine the likelihood of gaining access to credit by firms, and find that size and exporting appear to be the key characteristics. Credit constraints are significant for investment decisions. Together with size, access to credit is among the firm characteristics with the greatest impact on the likelihood to invest.

Keywords: access to finance; investment decision; small and medium-sized enterprises; China (search for similar items in EconPapers)
JEL-codes: D52 G21 G32 O16 (search for similar items in EconPapers)
Pages: 26 pages
Date: 2015-08-03, Revised 2016-06-14
New Economics Papers: this item is included in nep-ban, nep-bec, nep-cfn, nep-cna, nep-ent and nep-ger
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