Determinants of credit constraints for agricultural wholesalers in China

Lifang Hu, Rigoberto Lopez and Yinchu Zeng ()

International Food and Agribusiness Management Review, 2020, vol. 23, issue 4

Abstract: Following market reforms and economic growth since the late 1970s, agricultural wholesale markets in China have developed substantially and become increasingly important in food distribution. This paper investigates the determinants of credit constraints on agricultural wholesalers. A probit model with sample selection is estimated for credit constraints and demand using data collected via a nationwide survey of 1,422 agricultural wholesalers, of whom approximately 39% were designated as credit-constrained. Empirical results confirm that an absence of relatives in the business supports the notion of further discouraging potential borrowers from applying for credit in the first place. Moreover, the probability of being credit-constrained is significantly lower for legal corporations, wholesalers who have higher-value capital assets, larger-sized wholesalers, and those in a better micro-finance environment. Some policy implications are outlined.

Keywords: Agribusiness (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://ageconsearch.umn.edu/record/307604/files/ifamr2019.0161.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ags:ifaamr:307604

DOI: 10.22004/ag.econ.307604

Access Statistics for this article

More articles in International Food and Agribusiness Management Review from International Food and Agribusiness Management Association Contact information at EDIRC.
Bibliographic data for series maintained by AgEcon Search ().