Rent-seeking in bank credit and firm R&D innovation: The role of industrial agglomeration

Yunhe Li and Xiaotian Tina Zhang

Journal of Business Research, 2023, vol. 159, issue C

Abstract: Employing World Bank's survey data on the Chinese business environment, we empirically investigate the role of industrial agglomeration in moderating the effect of rent-seeking in bank credit on firm R&D innovation. The results show that rent-seeking in bank credit impedes firm R&D innovation, while industrial agglomeration corrects this impeding effect, which is also robust when considering endogenous problems. Furthermore, the results show that the moderating role of industrial agglomeration in correcting the negative effect of rent-seeking in bank credit on firm R&D innovation is more prominent for SMEs, non-state firms, and firms with more severe financial constraints. These findings suggest that the spatial agglomeration of industries can effectively alleviate the suppression effect of rent-seeking in credit corruption on firm R&D innovation, highlighting ways to promote firm R&D innovation in China's financially repressive environment.

Keywords: Rent-seeking; Bank Credit; Financial constraints; Firm R&D Innovation; Industrial Agglomeration (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0148296322009195
Full text for ScienceDirect subscribers only

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:eee:jbrese:v:159:y:2023:i:c:s0148296322009195

DOI: 10.1016/j.jbusres.2022.113454

Access Statistics for this article

Journal of Business Research is currently edited by A. G. Woodside

More articles in Journal of Business Research from Elsevier
Bibliographic data for series maintained by Catherine Liu ().