Local crowding out in China
- In China, between 2006 and 2013, local public debt crowded out the investment of private firms by tightening their funding constraints, while leaving state-owned firms’ investment unaffected. We establish this result using a purpose-built dataset for Chinese local public debt. Private firms invest less in cities with more public debt, the reduction in investment being larger for firms located farther from banks in other cities or more dependent on external funding. Moreover, in cities where public debt is high, private firms’ investment is more sensitive to internal cash flow, also when cash-flow sensitivity is estimated jointly with the probability of being credit-constrained.
Author: | Yi Huang, Marco Pagano, Ugo Panizza |
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URN: | urn:nbn:de:hebis:30:3-515873 |
URL: | https://ssrn.com/abstract=3477593 |
Parent Title (English): | Center for Financial Studies (Frankfurt am Main): CFS working paper series ; No. 632 |
Series (Serial Number): | CFS working paper series (632) |
Publisher: | Center for Financial Studies |
Place of publication: | Frankfurt, M. |
Document Type: | Working Paper |
Language: | English |
Year of Completion: | 2019 |
Year of first Publication: | 2019 |
Publishing Institution: | Universitätsbibliothek Johann Christian Senckenberg |
Release Date: | 2019/10/30 |
Tag: | China; credit constraints; crowding out; investment; local public debt |
Issue: | 15 September 2019 |
Page Number: | 87 |
HeBIS-PPN: | 456513299 |
Institutes: | Wirtschaftswissenschaften / Wirtschaftswissenschaften |
Wissenschaftliche Zentren und koordinierte Programme / Center for Financial Studies (CFS) | |
Dewey Decimal Classification: | 3 Sozialwissenschaften / 33 Wirtschaft / 330 Wirtschaft |
Sammlungen: | Universitätspublikationen |
Licence (German): | Deutsches Urheberrecht |