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Financial Constraints in China: the conditioning effect of FDI and State-Owned corporate sector

Author

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  • Sandra Poncet

    (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)

  • Walter Steingress

    (CORE - Center of Operation Research and Econometrics [Louvain] - UCL - Université Catholique de Louvain = Catholic University of Louvain)

  • Hylke Vandenbussche

    (CORE - Center of Operation Research and Econometrics [Louvain] - UCL - Université Catholique de Louvain = Catholic University of Louvain)

Abstract

Using a unique micro-level data set over the period 1998-2005 on Chinese firms, this paper presents empirical findings on the presence of credit constraints. Our findings are threefold. Firstly, private Chinese firms are credit constrained while state-owned firms and foreign-owned firms in China are not; Secondly, the geographical and sectoral presence of foreign capital alleviates credit constraints faced by private Chinese firms. Thirdly, geographical and sectoral presence of state firms aggravates financial constraints for private Chinese firms ("crowding out").

Suggested Citation

  • Sandra Poncet & Walter Steingress & Hylke Vandenbussche, 2010. "Financial Constraints in China: the conditioning effect of FDI and State-Owned corporate sector," Post-Print hal-00633806, HAL.
    • Handle: RePEc:hal:journl:hal-00633806
    DOI: 10.1016/j.chieco.2010.03.001
    Note: View the original document on HAL open archive server: https://hal.science/hal-00633806
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    Cited by:

    1. T.T.A. Duong & C.J.M. Kool & L. Zhang, 2019. "Borrowing constraints and export decision: the case of Vietnamese exporters," Working Papers 19-21, Utrecht School of Economics.
    2. Cheng, Chao & Yang, Liu, 2022. "What drives the credit constraints faced by Chinese small and micro enterprises?," Economic Modelling, Elsevier, vol. 113(C).
    3. Joachim Jarreau & Sandra Poncet, 2010. "Export Performance and Credit Constraints in China," Working Papers 2010-33, CEPII research center.

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