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

Author

Listed:
  • 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.

Suggested Citation

  • Oleksandr Talavera & Lin Xiong & Xiong Xiong, 2010. "Social Capital and Access to Bank Financing: The Case of Chinese Entrepreneurs," University of East Anglia Applied and Financial Economics Working Paper Series 019, School of Economics, University of East Anglia, Norwich, UK..
    • Handle: RePEc:uea:aepppr:2010_19
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    References listed on IDEAS

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    Citations

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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. Dr. Yen, Shang-Yung & Fan, Song-Chin, 2014. "An Exploration on the Business Model of Social Enterprises Owned By Chinese Entrepreneurs in Taiwan," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 4(10), pages 1275-1289, October.
    3. Pham, Tho & Talavera, Oleksandr, 2018. "Discrimination, Social Capital, and Financial Constraints: The Case of Viet Nam," World Development, Elsevier, vol. 102(C), pages 228-242.
    4. 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.
    5. 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, March.
    6. repec:taf:ijecbs:v:24:y:2017:i:1:p:27-51 is not listed on IDEAS
    7. 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.
    8. Oleksandr Talavera & Charlie Weir & Lin Xiong, 2017. "Time Allocation and Performance: The Case of Chinese Entrepreneurs," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 24(1), pages 27-51, January.

    More about this item

    Keywords

    China; social capital; entrepreneurs;

    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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