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The impact of credit constraints on the performance of Chinese agricultural wholesalers

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  • Lifang Hu
  • Rigoberto A. Lopez
  • Yinchu Zeng

Abstract

This article evaluates the impact of credit constraints on the performance of Chinese agricultural wholesalers. We estimate a stochastic frontier function using transaction and credit data of agricultural wholesalers from across China to estimate the efficiency and productivity impacts of credit constraints on sales of affected agricultural wholesalers. Empirical results show that micro- and smaller wholesalers are disproportionally impacted by credit constraints and that eliminating these constraints would increase the sales of affected agricultural wholesalers by approximately 15%. Thus, policies aimed at providing credit access for these wholesalers would significantly boost the performance of smaller agricultural wholesalers while improving the overall performance of the Chinese food supply chain without requiring additional non-credit inputs.

Suggested Citation

  • Lifang Hu & Rigoberto A. Lopez & Yinchu Zeng, 2019. "The impact of credit constraints on the performance of Chinese agricultural wholesalers," Applied Economics, Taylor & Francis Journals, vol. 51(35), pages 3864-3875, July.
    • Handle: RePEc:taf:applec:v:51:y:2019:i:35:p:3864-3875
    DOI: 10.1080/00036846.2019.1584385
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    1. Hu, Lifang & Lopez, Rigoberto A. & Zeng, Yinchu, 2020. "Determinants of credit constraints for agricultural wholesalers in China," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 23(4), June.

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    More about this item

    JEL classification:

    • Q14 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Finance
    • Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products

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