Do property rights matter for bank loans? Evidence from China

Ying Wu, Yi Zhang, Guangzi Li and Fang Li

Finance Research Letters, 2022, vol. 48, issue C

Abstract: This paper examines the impact of property rights protection on the cost of bank loans. Using a large sample of Chinese listed firms for the 2004-2010 period and the difference-in-difference method, we find that property rights protection has a negative effect on the cost of loans. The result is robust to a battery of sensitivity tests. Mechanism tests show that property rights protection reduces the cost of loans by alleviating information asymmetry. Our study provides new insight into the impact of property rights protection on the cost of loans.

Keywords: Property rights protection; Information asymmetry; Cost of loan; China (search for similar items in EconPapers)
JEL-codes: M41 O16 P14 (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:48:y:2022:i:c:s1544612322002185

DOI: 10.1016/j.frl.2022.102964

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