Social Capital and Access to Bank Financing: The Case of Chinese Entrepreneurs
AbstractThis paper presents the results of a study of the effects of social capital on access to bank financing. Based on a Chinese nationwide survey, our analysis suggests that entrepreneurs who contribute to charities are more likely to be successful in loan applications. In addition, we find that political party membership is an important determinant of state-owned bank financing, whereas time spent on social activities increases the probability of obtaining loans from commercial banks. Therefore, our data provide some evidence for substitutability between various types of social capital. To obtain a loan from a specific type of bank, an entrepreneur should access the relevant social network.
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Bibliographic InfoArticle provided by M.E. Sharpe, Inc. in its journal Emerging Markets Finance and Trade.
Volume (Year): 48 (2012)
Issue (Month): 1 (January)
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Web page: http://mesharpe.metapress.com/link.asp?target=journal&id=111024
China; entrepreneurs; social capital;
Other versions of this item:
- Oleksandr Talavera & Lin Xiong & Xiong Xiong, 2010. "Social Capital and Access to Bank Financing: The Case of Chinese Entrepreneurs," University of East Anglia Applied and Financial Economics Working Paper Series 019, School of Economics, University of East Anglia, Norwich, UK..
- G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
- L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
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