Credit rationing, innovation, and productivity: Evidence from small- and medium-sized enterprises in China
Jian Yu and
Economic Modelling, 2021, vol. 97, issue C, 220-230
Studies have shown that credit rationing hampers firm productivity. However, few studies have focused on the relationships among credit rationing, innovation, and firm productivity of small- and medium-sized enterprises in developing countries. This study addresses this research gap using a unique monthly dataset of 13,656 Chinese firms from January 2015 to December 2017 to directly measure credit rationing, and investigates how firm productivity reacts to credit rationing. The study finds that weak and strong credit rationing hamper firm productivity through the innovation channel. The study also finds that the negative effect of credit rationing is more obvious for firms with no real estate investment or less investment willingness.
Keywords: Credit rationing; Productivity; Innovation; Small- and medium-sized firms (search for similar items in EconPapers)
JEL-codes: D24 E51 L25 P34 (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecmode:v:97:y:2021:i:c:p:220-230
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