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Does Bank Loan Ratio Affect Investment of China's Listed Companies?

Yuan Yuan () and Kazuyuki Motohashi ()
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Yuan Yuan: The University of Tokyo

Economics Bulletin, 2010, vol. 30, issue 2, 1173-1181

Abstract: In this paper, we analyze whether the total debt ratios and bank loan ratios of Chinese listed companies had any impact on their fixed investment in 2001-2006, and whether this impact, if it existed, differed among companies with differing investment opportunities. The analysis led to the interesting result that the bank loan ratio had a stronger impact on fixed investment than the total debt ratio, and actually had the strong effect of restraining investment particularly by low-growth companies, implying that in China, banks supervise the investment activities of companies more strongly.

Keywords: JEL: G31; G32; D92 (search for similar items in EconPapers)
JEL-codes: G3 (search for similar items in EconPapers)
Date: 2010-05-03
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