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Bank financing, institutions and regional entrepreneurial activities: Evidence from China

Author

Listed:
  • Hasan, Iftekhar
  • Kobeissi, Nada
  • Wang, Haizhi
  • Zhou, Mingming

Abstract

We investigate the effects of bank financing on regional entrepreneurial activities in China. We present contrasting findings on the role of quantity vs. quality of bank financing on small business formation in China: while we document a consistent, significantly positive relationship between the quality of bank financing and new venture formation, we find that the quantity of supplied credit is insignificant. We report that formal institutions are positively correlated to regional entrepreneurial activities, and informal institutions substitute formal institutions. Our findings also reveal that the institutional environment tends to supplement bank financing in promoting regional entrepreneurial activities.

Suggested Citation

  • Hasan, Iftekhar & Kobeissi, Nada & Wang, Haizhi & Zhou, Mingming, 2017. "Bank financing, institutions and regional entrepreneurial activities: Evidence from China," International Review of Economics & Finance, Elsevier, vol. 52(C), pages 257-267.
    • Handle: RePEc:eee:reveco:v:52:y:2017:i:c:p:257-267
    DOI: 10.1016/j.iref.2017.01.013
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    Cited by:

    1. Mirzaei, Ali & Grosse, Robert, 2019. "The interaction of quantity and quality of finance: Did it make industries more resilient to the recent global financial crisis?," International Review of Economics & Finance, Elsevier, vol. 64(C), pages 493-512.
    2. Süleyman KALE & Mehmet Hasan EKEN, 2022. "Bank Efficiency and Economic Growth in the OECD Countries," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(3), pages 46-66, October.
    3. Hong Zhuang & Haiyan Yin & Miao Wang & Jiawen Yang, 2019. "Bank Efficiency and Regional Economic Growth: Evidence from China," Annals of Economics and Finance, Society for AEF, vol. 20(2), pages 661-689, November.
    4. Wang, Zhanhao & Zhao, Hong & Li, Lingxiang, 2022. "The positive side of bank wealth management products: Evidence from bank lending rate," Journal of Financial Stability, Elsevier, vol. 58(C).
    5. Lončarski, Igor & Marinč, Matej, 2020. "The political economy of relationship banking," Research in International Business and Finance, Elsevier, vol. 51(C).
    6. Margaret E. EHIGIE & Anthonia O. CLARK, 2023. "Education And Training: An Imperative For Entrepreneurial Success For Women," Oradea Journal of Business and Economics, University of Oradea, Faculty of Economics, vol. 8(2), pages 48-60, September.

    More about this item

    Keywords

    Entrepreneurial activities; Bank financing; Institutions; Rule of law; Social trust;
    All these keywords.

    JEL classification:

    • D02 - Microeconomics - - General - - - Institutions: Design, Formation, Operations, and Impact
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • L21 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Business Objectives of the Firm

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