Formal Finance and Trade Credit During China's Transition
Using a large panel dataset of Chinese industrial firms, the authors examine the determinants of access to loans from formal financial intermediaries and extension of trade credit. Poorly performing state-owned enterprises were more likely to redis...
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| Format: | Policy Research Working Paper |
| Language: | English |
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World Bank, Washington, DC
2012
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| Online Access: | http://documents.worldbank.org/curated/en/2007/04/7537723/formal-finance-trade-credit-during-chinas-transition http://hdl.handle.net/10986/7022 |
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okr-10986-70222021-04-23T14:02:33Z Formal Finance and Trade Credit During China's Transition Cull, Robert Xu, Lixin Colin Zhu, Tian ACCOUNTING BANK LOANS BANKING SYSTEM BANKS CREDIT COOPERATIVES CREDIT MARKETS DEBT DEFAULT RISK ECONOMIC GROWTH ECONOMIC OUTCOMES EXPROPRIATION FINANCIAL INFORMATION FINANCIAL INSTITUTIONS FINANCIAL INTERMEDIARIES FINANCING MECHANISM FOREIGN DIRECT INVESTMENT FOREIGN FIRMS FOREIGN INVESTORS GDP GROSS VALUE GROWTH POTENTIAL GROWTH RATE INSTITUTIONAL DEVELOPMENT INTEREST PAYMENTS INTEREST RATE INTEREST RATES INVESTMENT COMPANIES INVESTMENT PROJECTS LEGAL SYSTEMS MONOPOLY ONLENDING PORTFOLIO PROFIT MARGINS PROFITABILITY PROPERTY RIGHTS RETURN ON SALES SOFT BUDGET CONSTRAINTS STATE BANKS STATE OWNERSHIP TRADE CREDIT TRADING TRANSITION ECONOMIES TRANSITION ECONOMY TRUST COMPANIES VALUE ADDED VALUE OF OUTPUT WAGES Using a large panel dataset of Chinese industrial firms, the authors examine the determinants of access to loans from formal financial intermediaries and extension of trade credit. Poorly performing state-owned enterprises were more likely to redistribute credit to firms with less privileged access to loans through trade credit, a pattern consistent with some of the extension of trade credit being involuntary. By contrast, profitable private domestic firms were more likely to extend trade credit than unprofitable ones. Trade credit likely provided a substitute for loans for these private firms' customers that were shut out of formal credit markets. As biases in lending became less severe, the amount of trade credit extended by private firms declined. 2012-06-04T18:24:07Z 2012-06-04T18:24:07Z 2007-04 http://documents.worldbank.org/curated/en/2007/04/7537723/formal-finance-trade-credit-during-chinas-transition http://hdl.handle.net/10986/7022 English Policy Research Working Paper; No. 4204 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research :: Policy Research Working Paper 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 |
| language |
English |
| topic |
ACCOUNTING BANK LOANS BANKING SYSTEM BANKS CREDIT COOPERATIVES CREDIT MARKETS DEBT DEFAULT RISK ECONOMIC GROWTH ECONOMIC OUTCOMES EXPROPRIATION FINANCIAL INFORMATION FINANCIAL INSTITUTIONS FINANCIAL INTERMEDIARIES FINANCING MECHANISM FOREIGN DIRECT INVESTMENT FOREIGN FIRMS FOREIGN INVESTORS GDP GROSS VALUE GROWTH POTENTIAL GROWTH RATE INSTITUTIONAL DEVELOPMENT INTEREST PAYMENTS INTEREST RATE INTEREST RATES INVESTMENT COMPANIES INVESTMENT PROJECTS LEGAL SYSTEMS MONOPOLY ONLENDING PORTFOLIO PROFIT MARGINS PROFITABILITY PROPERTY RIGHTS RETURN ON SALES SOFT BUDGET CONSTRAINTS STATE BANKS STATE OWNERSHIP TRADE CREDIT TRADING TRANSITION ECONOMIES TRANSITION ECONOMY TRUST COMPANIES VALUE ADDED VALUE OF OUTPUT WAGES |
| spellingShingle |
ACCOUNTING BANK LOANS BANKING SYSTEM BANKS CREDIT COOPERATIVES CREDIT MARKETS DEBT DEFAULT RISK ECONOMIC GROWTH ECONOMIC OUTCOMES EXPROPRIATION FINANCIAL INFORMATION FINANCIAL INSTITUTIONS FINANCIAL INTERMEDIARIES FINANCING MECHANISM FOREIGN DIRECT INVESTMENT FOREIGN FIRMS FOREIGN INVESTORS GDP GROSS VALUE GROWTH POTENTIAL GROWTH RATE INSTITUTIONAL DEVELOPMENT INTEREST PAYMENTS INTEREST RATE INTEREST RATES INVESTMENT COMPANIES INVESTMENT PROJECTS LEGAL SYSTEMS MONOPOLY ONLENDING PORTFOLIO PROFIT MARGINS PROFITABILITY PROPERTY RIGHTS RETURN ON SALES SOFT BUDGET CONSTRAINTS STATE BANKS STATE OWNERSHIP TRADE CREDIT TRADING TRANSITION ECONOMIES TRANSITION ECONOMY TRUST COMPANIES VALUE ADDED VALUE OF OUTPUT WAGES Cull, Robert Xu, Lixin Colin Zhu, Tian Formal Finance and Trade Credit During China's Transition |
| geographic_facet |
East Asia and Pacific China |
| relation |
Policy Research Working Paper; No. 4204 |
| description |
Using a large panel dataset of Chinese
industrial firms, the authors examine the determinants of
access to loans from formal financial intermediaries and
extension of trade credit. Poorly performing state-owned
enterprises were more likely to redistribute credit to firms
with less privileged access to loans through trade credit, a
pattern consistent with some of the extension of trade
credit being involuntary. By contrast, profitable private
domestic firms were more likely to extend trade credit than
unprofitable ones. Trade credit likely provided a substitute
for loans for these private firms' customers that were
shut out of formal credit markets. As biases in lending
became less severe, the amount of trade credit extended by
private firms declined. |
| format |
Publications & Research :: Policy Research Working Paper |
| author |
Cull, Robert Xu, Lixin Colin Zhu, Tian |
| author_facet |
Cull, Robert Xu, Lixin Colin Zhu, Tian |
| author_sort |
Cull, Robert |
| title |
Formal Finance and Trade Credit During China's Transition |
| title_short |
Formal Finance and Trade Credit During China's Transition |
| title_full |
Formal Finance and Trade Credit During China's Transition |
| title_fullStr |
Formal Finance and Trade Credit During China's Transition |
| title_full_unstemmed |
Formal Finance and Trade Credit During China's Transition |
| title_sort |
formal finance and trade credit during china's transition |
| publisher |
World Bank, Washington, DC |
| publishDate |
2012 |
| url |
http://documents.worldbank.org/curated/en/2007/04/7537723/formal-finance-trade-credit-during-chinas-transition http://hdl.handle.net/10986/7022 |
| _version_ |
1764401765427445760 |