Broadband policy and bank loans

Donghui Li, Yuan Li and Chun Yuan

Pacific-Basin Finance Journal, 2025, vol. 90, issue C

Abstract: Using a unique loan-level dataset from a nationwide state-owned commercial bank in China, we find that loan pricing of borrowing firms decreases significantly following a staggered implementation of Broadband China by reducing the costs of information gathering and transmission for banks as well as increasing the firm business environment. This effect is more pronounced when borrowing firms are smaller, followed by fewer analysts, or located in regions with low degrees of marketization and education. We also find that broadband policy increases the loan size. We conduct various robustness tests to consider endogeneity issues, following which our main conclusions remain valid.

Keywords: Information infrastructure; Broadband China; Loan pricing (search for similar items in EconPapers)
JEL-codes: D21 G32 O33 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:pacfin:v:90:y:2025:i:c:s0927538x24003822

DOI: 10.1016/j.pacfin.2024.102630

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