Financial constraints in China : firm-level evidence ♠

  title={Financial constraints in China : firm-level evidence ♠},
  author={Sandra Poncet and Walter Steingress and Hylke Vandenbussche},
This paper uses a unique micro-level data-set on Chinese firms to test for the existence of a "political-pecking order" in the allocation of credit. 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… CONTINUE READING
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