Cross-shareholding and financing constraints of private firms: Based on the perspective of social network

Zixuan Peng, Haowei Sha, Hongxing Lan and Xudong Chen

Physica A: Statistical Mechanics and its Applications, 2019, vol. 520, issue C, 381-389

Abstract: This paper examines the impact of cross-shareholding and network positions in the cross-shareholding network on the financing constraints of private firms in China. Two indices are constructed to measure the position characteristics: network centrality and structural holes. Based on the data of listed private firms for 2008-2014, we find that the cross-shareholding relationship can significantly relieve the financing constraints of private firms. However, the role of cross-shareholding in reducing financing constraints is weakened as the level of financial marketization increases. Further, the results suggest that the higher the centralities or the more structural holes of private firms there are in the cross-shareholding networks, the lower the financing constraints of private firms.

Keywords: Cross-shareholding; Network position; Financing constraint; Social network (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:phsmap:v:520:y:2019:i:c:p:381-389

DOI: 10.1016/j.physa.2019.01.049

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