Credit Allocation and Firm Productivity Under Financial Imperfection: Evidence from Chinese Manufacturing Firms

Hua Shang, Teng Zhang and Puman Ouyang

Emerging Markets Finance and Trade, 2018, vol. 54, issue 5, 992-1010

Abstract: The role of the financial system, especially the credit market, in productivity enhancement has interested many researchers. However, how credit allocation affects firms’ productivity in emerging economies remains unanswered. Using data from the Annual Survey of Industrial Firms (ASIF) during 1999–2007, this article examines whether credit allocation impacts Chinese firms’ productivity under financial imperfection. Our results show that the size of credit market has no influence on Chinese firms’ total factor productivity (TFP), while allocating more credit to non-SOEs significantly promotes firm TFP. Our further analysis shows that firms which are less subsidized, smaller, more external financially dependent, and more labor intensive are affected more by credit allocation. As China is the largest emerging economy, our analysis also sheds light on the development of firms in emerging economies.

Date: 2018
References: Add references at CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
http://hdl.handle.net/10.1080/1540496X.2017.1410474 (text/html)
Access to full text is restricted to subscribers.

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:mes:emfitr:v:54:y:2018:i:5:p:992-1010

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/MREE20

DOI: 10.1080/1540496X.2017.1410474

Access Statistics for this article

More articles in Emerging Markets Finance and Trade from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().