Advanced Search
MyIDEAS: Login to save this paper or follow this series

Does the Chinese Banking System Promote the Growth of Firms?

Contents:

Author Info

  • Panicos O. Demetriades

    ()

  • Jun Du
  • Sourafel Girma
  • Chenggang Xu

Abstract

Using a large panel dataset of Chinese manufacturing enterprises during 1999-2005, which accounts for over 90% of China’s industrial output, and robust econometric procedures we show that the Chinese banking system has helped to support the growth of both firm value added and TFP. We find that access to bank loans is positively correlated with future value added and TFP growth. We also find that firms with access to bank loans tend to grow faster in regions with greater banking sector development. While the effects of bank loans on firm growth are more pronounced in the case of purely private-owned and foreign firms, they are positive and statistically significant even in the case of state-owned and collectively-owned firms. We show that excluding loss-making firms from the sample does not change the qualitative nature of our results.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.le.ac.uk/economics/research/RePEc/lec/leecon/dp08-6.pdf
Download Restriction: no

Bibliographic Info

Paper provided by Department of Economics, University of Leicester in its series Discussion Papers in Economics with number 08/6.

as in new window
Length:
Date of creation: Feb 2008
Date of revision:
Handle: RePEc:lec:leecon:08/6

Contact details of provider:
Postal: Department of Economics University of Leicester, University Road. Leicester. LE1 7RH. UK
Phone: +44 (0)116 252 2887
Fax: +44 (0)116 252 2908
Email:
Web page: http://www2.le.ac.uk/departments/economics
More information through EDIRC

Order Information:
Email:
Web: http://www2.le.ac.uk/departments/economics/research/discussion-papers

Related research

Keywords: Chinese banking system development; value added and TFP growth; panel dataset;

Other versions of this item:

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Mata, Jose & Portugal, Pedro & Guimaraes, Paulo, 1995. "The survival of new plants: Start-up conditions and post-entry evolution," International Journal of Industrial Organization, Elsevier, Elsevier, vol. 13(4), pages 459-481, December.
  2. Yingyi Qian & Chenggang Xu, 1993. "Why Chinas Economic Reforms Differ: The M-Form Hierarchy and Entry/Expansion of the Non-State Sector," CEP Discussion Papers dp0154, Centre for Economic Performance, LSE.
  3. Li, Hongbin & Zhou, Li-An, 2005. "Political turnover and economic performance: the incentive role of personnel control in China," Journal of Public Economics, Elsevier, Elsevier, vol. 89(9-10), pages 1743-1762, September.
  4. Eric Maskin & Yingyi Qian & Chenggang Xu, 1999. "Incentives, Information, and Organizational Form," Working Papers, Stanford University, Department of Economics 99009, Stanford University, Department of Economics.
  5. James Levinsohn & Amil Petrin, 2000. "Estimating Production Functions Using Inputs to Control for Unobservables," NBER Working Papers 7819, National Bureau of Economic Research, Inc.
  6. Rousseau, Peter L. & Xiao, Sheng, 2007. "Banks, stock markets, and China's `great leap forward'," Emerging Markets Review, Elsevier, Elsevier, vol. 8(3), pages 206-217, September.
  7. Genevieve Boyreau-Debray & Shang-Jin Wei, 2005. "Pitfalls of a State-Dominated Financial System: The Case of China," NBER Working Papers 11214, National Bureau of Economic Research, Inc.
  8. David Dollar & Shang-Jin Wei, 2007. "Das (Wasted) Kapital: Firm Ownership and Investment Efficiency in China," NBER Working Papers 13103, National Bureau of Economic Research, Inc.
  9. Andrianova, Svetlana & Demetriades, Panicos & Shortland, Anja, 2008. "Government ownership of banks, institutions, and financial development," Journal of Development Economics, Elsevier, Elsevier, vol. 85(1-2), pages 218-252, February.
  10. Wooldridge, Jeffrey M., 1995. "Selection corrections for panel data models under conditional mean independence assumptions," Journal of Econometrics, Elsevier, Elsevier, vol. 68(1), pages 115-132, July.
  11. David Dollar & Shang-Jin Wei, 2007. "Das (Wasted) Kapital," IMF Working Papers 07/9, International Monetary Fund.
  12. Yingyi Qian & Chenggang Xu, 1993. "Why China's economic reforms differ: the M-form hierarchy and entry/expansion of the non-state sector," The Economics of Transition, The European Bank for Reconstruction and Development, The European Bank for Reconstruction and Development, vol. 1(2), pages 135-170, 06.
  13. Yingyi Qian & Cheng-Gang Xu, 1993. "Why China's economic reforms differ: the m-form hierarchy and entry/expansion of the non-state sector," LSE Research Online Documents on Economics, London School of Economics and Political Science, LSE Library 3755, London School of Economics and Political Science, LSE Library.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Cheng, X. & Degryse, H.A., 2006. "The Impact of Bank and Non-Bank Financial Institutions on Local Economic Growth in China," Discussion Paper, Tilburg University, Tilburg Law and Economic Center 2006-009, Tilburg University, Tilburg Law and Economic Center.
  2. Abdullahi Ahmed & Andrew Hulten, 2014. "Financial Globalization in Botswana and Nigeria: A Critique of the Thresholds Paradigm," The Review of Black Political Economy, Springer, Springer, vol. 41(2), pages 177-203, June.
  3. Laura Capera & Andrés Murcia Pabón & Dairo Estrada, . "Efectos de los Límites a las Tasas de Interés sobre la Profundización Financiera," Temas de Estabilidad Financiera, Banco de la Republica de Colombia 057, Banco de la Republica de Colombia.
  4. Chandra, Piyush & Long, Cheryl, 2013. "Anti-dumping Duties and their Impact on Exporters: Firm Level Evidence from China," World Development, Elsevier, Elsevier, vol. 51(C), pages 169-186.
  5. Chenggang Xu, 2012. "Comment on "China's Financial System: Opportunities and Challenges"," NBER Chapters, in: Capitalizing China, pages 143-145 National Bureau of Economic Research, Inc.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:lec:leecon:08/6. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Mrs. Alexandra Mazzuoccolo).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.