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Formal Finance and Trade Credit During China's Transition / Tian Zhu
World Bank Open Knowledge Repository (formerly "World Bank E-Library Publications") Available online
World Bank Open Knowledge Repository (formerly "World Bank E-Library Publications")- Format:
- Book
- Government document
- Author/Creator:
- Zhu, Tian
- Series:
- Policy research working papers.
- World Bank e-Library.
- Language:
- English
- Subjects (All):
- Access To Cred Bank.
- Banks and Banking Reform.
- Business School.
- Buyers.
- Cred Customers.
- Debt Markets.
- Economic Activity.
- Economic Theory and Research.
- Emerging Markets.
- Finance.
- Finance and Financial Sector Development.
- Financial Crisis Management and Restructuring.
- Financial Institutions.
- Financial Intermediaries.
- Financial Intermediation.
- Financial Literacy.
- Financial Support.
- Information.
- Investment and Investment Climate.
- Loans.
- Macroeconomics and Economic Growth.
- Market Economies.
- Ownership.
- Private Sector Development.
- Prof Property.
- Reinvestment.
- Security.
- Transactions.
- Local Subjects:
- Access To Cred Bank.
- Banks and Banking Reform.
- Business School.
- Buyers.
- Cred Customers.
- Debt Markets.
- Economic Activity.
- Economic Theory and Research.
- Emerging Markets.
- Finance.
- Finance and Financial Sector Development.
- Financial Crisis Management and Restructuring.
- Financial Institutions.
- Financial Intermediaries.
- Financial Intermediation.
- Financial Literacy.
- Financial Support.
- Information.
- Investment and Investment Climate.
- Loans.
- Macroeconomics and Economic Growth.
- Market Economies.
- Ownership.
- Private Sector Development.
- Prof Property.
- Reinvestment.
- Security.
- Transactions.
- Physical Description:
- 1 online resource (36 pages)
- Place of Publication:
- Washington, D.C., The World Bank, 2007
- System Details:
- data file
- Summary:
- 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.
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