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The role of government intervention in financial development: micro‐evidence from China

Author

Listed:
  • Lingbing Feng
  • Tong Fu
  • Nicholas Apergis
  • Hu Tao
  • Wu Yan

Abstract

This paper distinguishes between different forms of government intervention upon a firm, including the firm’s tax burden, sales to the government and state shares. We investigate how these types of government intervention affect micro‐financial development. With evidence from China, we confirm that the micro‐financial development is promoted by the firm’s tax burden and sales to the government but constrained by the firm’s state shares. The findings remain robust to the endogeneity issue. The findings offer applications for government policies or a firm’s financing strategies.

Suggested Citation

  • Lingbing Feng & Tong Fu & Nicholas Apergis & Hu Tao & Wu Yan, 2019. "The role of government intervention in financial development: micro‐evidence from China," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 59(5), pages 2855-2878, December.
    • Handle: RePEc:bla:acctfi:v:59:y:2019:i:5:p:2855-2878
    DOI: 10.1111/acfi.12559
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    Cited by:

    1. Zhi Wang & Geert Braam & Daniel Reimsbach & Jiaxin Wang, 2020. "Political embeddedness and firms’ choices of earnings management strategies in China," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 60(5), pages 4723-4755, December.
    2. Ren Lu & Qing Song & Ting Xia & Daguo Lv & Torger Reve & Ze Jian, 2021. "Unpacking the U‐shaped relationship between related variety and firm sales: Evidence from Japan," Papers in Regional Science, Wiley Blackwell, vol. 100(5), pages 1136-1157, October.
    3. Luo, Kun & Lim, Edwin KiaYang & Qu, Wen & Zhang, Xuan, 2021. "Board cultural diversity, government intervention and corporate innovation effectiveness: Evidence from China," Journal of Contemporary Accounting and Economics, Elsevier, vol. 17(2).

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