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SOE preference and credit misallocation: A model and some evidence from China

Xu Wei, Yongwei Chen, Mohan Zhou and Yi Zhou ()

Economics Letters, 2016, vol. 138, issue C, 38-41

Abstract: We endogenize credit misallocation by introducing the government’s preference. The local government determines the credit subsidy to SOEs after a trade-off between SOEs’ profits and local aggregate outputs. Credit misallocation is more severe in regions where SOE share is high.

Keywords: State-owned enterprises; Credit misallocation; Local government; China (search for similar items in EconPapers)
JEL-codes: O43 O53 H25 (search for similar items in EconPapers)
Date: 2016
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Handle: RePEc:eee:ecolet:v:138:y:2016:i:c:p:38-41