Market Facilitation by Local Government and Firm Efficiency : Evidence from China

We use data from a large survey of Chinese firms to investigate whether local government efforts to facilitate market development improve firm efficiency. Both government provision of information about products, markets, and innovation and government assistance in arranging loans are positively asso...

Full description

Bibliographic Details
Main Authors:	Cull, Robert, Xu, Lixin Colin, Yang, Xi, Zhou, Li-An, Zhu, Tian
Format:	Journal Article
Published:	Elsevier 2018
Subjects:	GOVERNMENT FACILITATION LOCAL GOVERNMENT MARKET FAILURE FIRM EFFICIENCY COMPETITION POLICY PUBLIC INTERVENTION ACCESS TO FINANCE PRIVATE SECTOR DEVELOPMENT
Online Access:	http://hdl.handle.net/10986/29453

id	okr-10986-29453
recordtype	oai_dc
spelling	okr-10986-294532021-05-25T10:54:34Z Market Facilitation by Local Government and Firm Efficiency : Evidence from China Cull, Robert Xu, Lixin Colin Yang, Xi Zhou, Li-An Zhu, Tian GOVERNMENT FACILITATION LOCAL GOVERNMENT MARKET FAILURE FIRM EFFICIENCY COMPETITION POLICY PUBLIC INTERVENTION ACCESS TO FINANCE PRIVATE SECTOR DEVELOPMENT We use data from a large survey of Chinese firms to investigate whether local government efforts to facilitate market development improve firm efficiency. Both government provision of information about products, markets, and innovation and government assistance in arranging loans are positively associated with firm efficiency, and those private firms with weak access to and knowledge of financial, input, and product markets benefit most from such assistance. These patterns are robust across multiple estimation approaches. Our examination of the determinants of local government facilitation also suggests that it gravitates toward promoting efficiency, though there are also indications that rent-seeking may play a role. Our evidence is consistent with the notion that government facilitation can help some firms overcome market failures in the early stages of a country's private sector development. Though causality is difficult to establish, we argue that changing fiscal dynamics that forced local governments to become increasingly self-reliant in generating revenue, and a government promotion system based on local economic performance, were key motivating factors for market facilitation by local government officials. 2018-03-09T22:29:03Z 2018-03-09T22:29:03Z 2017-02 Journal Article Journal of Corporate Finance 0929-1199 http://hdl.handle.net/10986/29453 CC BY-NC-ND 3.0 IGO http://creativecommons.org/licenses/by-nc-nd/3.0/igo World Bank Elsevier Publications & Research :: Journal Article Publications & Research East Asia and Pacific China
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
topic	GOVERNMENT FACILITATION LOCAL GOVERNMENT MARKET FAILURE FIRM EFFICIENCY COMPETITION POLICY PUBLIC INTERVENTION ACCESS TO FINANCE PRIVATE SECTOR DEVELOPMENT
spellingShingle	GOVERNMENT FACILITATION LOCAL GOVERNMENT MARKET FAILURE FIRM EFFICIENCY COMPETITION POLICY PUBLIC INTERVENTION ACCESS TO FINANCE PRIVATE SECTOR DEVELOPMENT Cull, Robert Xu, Lixin Colin Yang, Xi Zhou, Li-An Zhu, Tian Market Facilitation by Local Government and Firm Efficiency : Evidence from China
geographic_facet	East Asia and Pacific China
description	We use data from a large survey of Chinese firms to investigate whether local government efforts to facilitate market development improve firm efficiency. Both government provision of information about products, markets, and innovation and government assistance in arranging loans are positively associated with firm efficiency, and those private firms with weak access to and knowledge of financial, input, and product markets benefit most from such assistance. These patterns are robust across multiple estimation approaches. Our examination of the determinants of local government facilitation also suggests that it gravitates toward promoting efficiency, though there are also indications that rent-seeking may play a role. Our evidence is consistent with the notion that government facilitation can help some firms overcome market failures in the early stages of a country's private sector development. Though causality is difficult to establish, we argue that changing fiscal dynamics that forced local governments to become increasingly self-reliant in generating revenue, and a government promotion system based on local economic performance, were key motivating factors for market facilitation by local government officials.
format	Journal Article
author	Cull, Robert Xu, Lixin Colin Yang, Xi Zhou, Li-An Zhu, Tian
author_facet	Cull, Robert Xu, Lixin Colin Yang, Xi Zhou, Li-An Zhu, Tian
author_sort	Cull, Robert
title	Market Facilitation by Local Government and Firm Efficiency : Evidence from China
title_short	Market Facilitation by Local Government and Firm Efficiency : Evidence from China
title_full	Market Facilitation by Local Government and Firm Efficiency : Evidence from China
title_fullStr	Market Facilitation by Local Government and Firm Efficiency : Evidence from China
title_full_unstemmed	Market Facilitation by Local Government and Firm Efficiency : Evidence from China
title_sort	market facilitation by local government and firm efficiency : evidence from china
publisher	Elsevier
publishDate	2018
url	http://hdl.handle.net/10986/29453
_version_	1764469388536184832

Market Facilitation by Local Government and Firm Efficiency : Evidence from China

Similar Items