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Panel Analysis of Chinese Corporate Debt -- How Far Have Market Mechanisms Penetrated? --

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Listed:
  • Hideto Sakashita

    (Bank of Japan)

  • Ko Nakayama

    (Bank of Japan)

Abstract

In this paper, we investigate the impact of reforms in the banking sector and shifts of the monetary policy focus from quantitative controls to interest-rate controls on bank-lending and corporate-borrowing activities by applying a panel-data analysis of financial data of listed Chinese companies. Our three main conclusions on corporate borrowing are as follows: 1) quantitative controls on bank lending still remain through such mechanisms as 'window guidance', but their impacts are diminishing; 2) the effect of official lending rates is increasing; and 3) banks are placing more emphasis on financial indicators and corporate conditions when lending money to borrowing companies.

Suggested Citation

  • Hideto Sakashita & Ko Nakayama, 2006. "Panel Analysis of Chinese Corporate Debt -- How Far Have Market Mechanisms Penetrated? --," Bank of Japan Working Paper Series 06-E-12, Bank of Japan.
    • Handle: RePEc:boj:bojwps:06-e-12
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    References listed on IDEAS

    as
    1. Richard Podpiera, 2006. "Progress in China’s Banking Sector Reform: Has Bank Behavior Changed?," IMF Working Papers 2006/071, International Monetary Fund.
    2. Steven M. Fazzari & R. Glenn Hubbard & Bruce C. Petersen, 1988. "Financing Constraints and Corporate Investment," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 19(1), pages 141-206.
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