Bank financing, institutions and regional entrepreneurial activities: Evidence from China

Iftekhar Hasan, Nada Kobeissi, Haizhi Wang and Mingming Zhou ()

International Review of Economics & Finance, 2017, vol. 52, issue C, 257-267

Abstract: We investigate the effects of bank financing on regional entrepreneurial activities in China. We present contrasting findings on the role of quantity vs. quality of bank financing on small business formation in China: while we document a consistent, significantly positive relationship between the quality of bank financing and new venture formation, we find that the quantity of supplied credit is insignificant. We report that formal institutions are positively correlated to regional entrepreneurial activities, and informal institutions substitute formal institutions. Our findings also reveal that the institutional environment tends to supplement bank financing in promoting regional entrepreneurial activities.

Keywords: Entrepreneurial activities; Bank financing; Institutions; Rule of law; Social trust (search for similar items in EconPapers)
JEL-codes: D02 G21 L21 (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:reveco:v:52:y:2017:i:c:p:257-267

DOI: 10.1016/j.iref.2017.01.013

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