Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
5090085 | Journal of Banking & Finance | 2011 | 11 Pages |
Abstract
This paper studies the impact of foreign bank entry on domestic firms' access to bank credit using a within-country staggered geographic variation in the policy of foreign bank lending in China. The paper finds that after foreign bank entry profitable firms use more long-term bank loans; whereas firms with higher value of potential collateral do not. It also finds that non-state-owned firms become able to substitute some trade credit with long-term bank loans. The findings suggest that less opaque firms and non-state-owned firms benefit more from foreign bank entry and that collateral may only play a limited role in mitigating the problem of information asymmetry when creditors' rights are not well protected in a host country.
Keywords
Related Topics
Social Sciences and Humanities
Economics, Econometrics and Finance
Economics and Econometrics
Authors
Huidan Lin,