THE ROLE OF FINANCIAL INSTITUTION MARKETIZATION IN CHINA’S INDUSTRIAL CONTESTABILITY

Xiaohui Hou, Cheng Li () and Qing Wang ()
Additional contact information
Cheng Li: School of Economics and Finance, Xi’an Jiaotong University, Xian Ning West Road No. 28, 710049, Xi’an, Shaanxi Province, P. R. China
Qing Wang: #x2020;Xi’an Branch, The People’s Bank of China, P. R. China

The Singapore Economic Review (SER), 2018, vol. 63, issue 05, 1245-1261

Abstract: In this paper, we investigate how the marketization of financial institutions affects China’s industrial contestability. Our empirical results show that a higher degree of marketization of financial institutions is significantly associated with both the operation of more firms and the smaller average size of firms. Moreover, the lower and upper quartiles of the conditional distribution of firm size are all significantly negatively associated with the higher marketization degree of financial institutions, whereas increased financial institution competition and market-oriented allocation of credit funds have greater negative effect on the average size of larger firms, relative to smaller firms. In sum, improvements on the degree of marketization of financial institutions lead to an increase in the number of firms and a reduction in the average size of firms in China’s industry. Therefore, the marketization of financial institutions has a significant positive impact on China’s industrial contestability.

Keywords: Financial institution; marketization; industrial contestability (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.worldscientific.com/doi/abs/10.1142/S0217590816500089
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:wsi:serxxx:v:63:y:2018:i:05:n:s0217590816500089

Ordering information: This journal article can be ordered from

DOI: 10.1142/S0217590816500089

Access Statistics for this article

The Singapore Economic Review (SER) is currently edited by Euston Quah

More articles in The Singapore Economic Review (SER) from World Scientific Publishing Co. Pte. Ltd.
Bibliographic data for series maintained by Tai Tone Lim ().