 Between Mao and markets: new evidence on segmentation of the bank loan market in ChinaMasanori Ohkuma Applied Economics Letters, 2010, vol. 17, issue 12, 1213-1218 Abstract: This article examines the local bank lending's dependency upon local deposits within China in the Feldstein-Horioka vein. In the case of a transition economy like China, it would be appropriate to assume the presence of a significant level of disparity in the cost of funds between State-Owned Enterprises (SOEs) and non-SOEs. For this purpose, a dataset of the provincial deposit rates and the provincial loan rates for the state and the nonstate sectors is built. Even after controlling the national- and province-specific shocks, the correlation between the local deposit rates and the local loan rates for the nonstate sector, in contrast with that for the state sector, is even higher than for the Organization for Economic Co-operation and Development (OECD) member countries. The findings suggest that serious asymmetric information problems between banks and non-SOEs might impede cross-regional lending and prevent the development of the nonstate sector within China. Date: 2010 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:taf:apeclt:v:17:y:2010:i:12:p:1213-1218 Ordering information: This journal article can be ordered from DOI: 10.1080/00036840902845426 Access Statistics for this article Applied Economics Letters is currently edited by Anita Phillips More articles in Applied Economics Letters from Taylor & Francis Journals |
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