Financial constraints in China: firm-level evidence

Sandra Poncet (), Walter Steingress and Hylke Vandenbussche

No 2008048, Discussion Papers (ECON - Département des Sciences Economiques) from Université catholique de Louvain, Département des Sciences Economiques

Abstract: This paper uses a unique micro-level data-set on Chinese firms to test for the existence of a “political-pecking order” in the allocation of credit. Our findings are threefold. Firstly, private Chinese firms are credit constrained while State-owned firms and foreign-owned firms in China are not; Secondly, the geographical and sectoral presence of foreign capital alleviates credit constraints face by private Chinese firms (“crowding out”). Therefore it seems that ongoing restructuring of the state-owned sector and further liberalization of foreign capital inflows in China can help to circumvent financial constraints and can boost the investment of private firms

Keywords: Investment cashflow sensitivity; China; firm level data; foreign direct investment (search for similar items in EconPapers)
JEL-codes: E22 G32 (search for similar items in EconPapers)
Pages: 28
Date: 2008-12-01
New Economics Papers: this item is included in nep-ene
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Citations: View citations in EconPapers (6)

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http://sites.uclouvain.be/econ/DP/IRES/2008-48.pdf (application/pdf)

Related works:
Journal Article: Financial constraints in China: Firm-level evidence (2010)
Working Paper: Financial constraints in China: firm-level evidence (2010)
Working Paper: Financial Constraints in China: Firm-Level Evidence (2009)
Working Paper: Financial Constraints in China: Firm-Level Evidence (2009)
Working Paper: Financial constraints in China: firm-level evidence (2009)
Working Paper: Financial constraints in China: firm-level evidence (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:ctl:louvec:2008048

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