Credit Market Development and Firm Innovation: Evidence from the People’s Republic of China
Shang, Hua; Song, Quanyun; Wu, Yu | January 2017
Abstract
From the perspective of credit allocation, this paper analyzes the effects of credit market development on the innovative capacities of industrial firms in the People’s Republic of China. Using a large dataset of industrial firms in 31 provinces in the People’s Republic of China, we find that credit market development enhances firms’ product innovation incentives and outcomes. We further show that firms’ credit constraints and firms’ performances are two channels through which credit market development affects innovative capacities of firms. Our results are neither driven by the increase in the quantity of credit, nor by the increase in the number of firms in a province. The results are robust to different samples, different estimation methods, and alternative measures of credit market development.
Citation
Shang, Hua; Song, Quanyun; Wu, Yu. 2017. Credit Market Development and Firm Innovation: Evidence from the People’s Republic of China. © Asian Development Bank Institute. http://hdl.handle.net/11540/6732. License: CC BY 3.0 IGO.Keywords
ADB
Self Financing
Aid Financing
Financial Aid
Development Banks
Project Impact
Export Credit Financing
Industrialization
Industrial Economics
Industrial Development
Industrial Policy
Cofinancing
Development Financing
Economic Development and Finance
Finance
Financial Advisory Services
Financial Assistance
Financial Support
Credit Policy
Credit Cooperatives
Industrial Credit
Commercial credit
Commerce and Industry
Intra-Industry Trade
Large Scale Industry
Labor
Development Banks
Asset allocation
Investment management
Commercial documents
Credit control
Credit allocation
Capital market
Developing countries
Market share
Labor
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Citable URI
http://hdl.handle.net/11540/6732Metadata
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