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Social Capital and Access to Bank Financing: The Case of Chinese Entrepreneurs

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Listed author(s):
  • Oleksandr Talavera

    ()

    (School of Economics, University of East Anglia)

  • Lin Xiong

    (Robert Gordon University)

  • Xiong Xiong

    (University of Tianjin)

Abstract

This paper studies the effects of social capital on access to bank financing. Based on a Chinese nationwide survey our analysis suggests that entrepreneurs who spend more time on social activities are more likely to obtain a loan from commercial banks. In addition, we find that membership of political parties is an important determinant of state bank financing. Finally, our data reveal some evidence of substitutability between various types of social capital. To get a loan from a specific type of bank, an entrepreneur should access the relevant social network. The results of our analysis are robust to a number of specification checks.

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File URL: https://archive.uea.ac.uk/menu/depts/eco/research/RePEc/uea/papers_pdf/UEA-AFE-019.pdf
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Paper provided by School of Economics, University of East Anglia, Norwich, UK. in its series University of East Anglia Applied and Financial Economics Working Paper Series with number 019.

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Date of creation: 12 Oct 2010
Handle: RePEc:uea:aepppr:2010_19
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Keywords: China; social capital; entrepreneurs;

Other versions of this item:

Find related papers by JEL classification:
  • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
  • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship

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Cited by:

  1. Andreas Stephan & Andriy Tsapin & Oleksandr Talavera, 2012. "Main Bank Power, Switching Costs, and Firm Performance: Theory and Evidence from Ukraine," Emerging Markets Finance and Trade, M.E. Sharpe, Inc., vol. 48(2), pages 76-93, March.
  2. Tho Pham & Oleksandr Talavera, 2017. "Discrimination, social capital, and financial constraints: The case of Viet Nam," WIDER Working Paper Series 067, World Institute for Development Economic Research (UNU-WIDER).
  3. Reindolf Yao Nani Adzido & Emmanuel Kwame Ahiave & Victor Yao Kamasah & Vivian Akoto & Onesimus Kwashie Dorkpah, 2016. "Assessing Financial Openness and Access to Credit Facilities: The Case of Banks in Ho, Ghana," International Journal of Academic Research in Accounting, Finance and Management Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Accounting, Finance and Management Sciences, vol. 6(3), pages 47-57, July.
  4. Liang Zhang & Tie-nan Wang & Hung-Gay Fung, 2014. "Market Reaction to Corporate Social Responsibility Announcements: Evidence from China," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 22(2), pages 81-101, 03.
  5. Kung'U, Gabriel Kamau, 2011. "Factors influencing SMEs access to finance: A case study of Westland Division,Kenya," MPRA Paper 66633, University Library of Munich, Germany, revised 2014.
  6. Talavera, Oleksandr & Xiong, Lin & Weir, Charlie, 2016. "Time allocation and performance: the case of Chinese entrepreneurs," MPRA Paper 69778, University Library of Munich, Germany.

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