Financial sector opening and financial constraints

An empirical study based on China’s experiences

Bibliographic Data

ID12917880
AuthorsLiqing Zhang (0000-0002-6830-5770, Central University of Finance and Economics, corresponding author), Yan Zhang (0000-0001-8460-2671, Central University of Finance and Economics), Zhixiao Dong (0000-0003-2907-396X, Central University of Finance and Economics)
Year2019
Volume12
Issue3
Pages272-296
Publication date2019-09-02
Open AccessNo
TypeARTICLE
VenueChina Economic Journal (JOURNAL)
Journal identifiersISSN: 1753-8963 • E-ISSN: 1753-8971
PublisherRoutledge (PUBLISHER • GB)
DOI10.1080/17538963.2019.1656916
OpenAlexW2974082270
LanguageEN
Citations received1
References cited25

The paper investigates the effect of financial sector opening on financial constraints based on the experiences in China. We firstly review the policy of China’s financial sector opening and set up exogenous policy measures. Then based on the panel data of listed firms from 2010 to 2015, we calculate four indices to measure China’s firm-level financial constraints through internal and external finance channels. We find that China’s financial sector opening alleviates financial constraints and upgrades the financing structure for China’s listed firms. Financial sector opening also eliminates ownership discrimination and promotes financing efficiency, to alleviate financial constraints of private enterprises and profitable enterprises. The mechanism of the effects of financial sector opening on financial constrain is mainly through the collateral channels and the elimination of information asymmetry

Business · China · Collateral · Economics · Financial analysis · Financial ratio · Financial sector · Financial sector development · Financial system · Indirect finance · Information asymmetry · Panel data · Private sector · Banking stability, regulation, efficiency · Corporate Finance and Governance · Islamic Finance and Banking Studies · Finance

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