Bank financing, institutions and regional entrepreneurial activities: Evidence from China
Hasan, Iftekhar; Kobeissi, Nada; Wang, Haizhi; Zhou, Mingming (13.12.2017)
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JulkaisusarjaInternational Review of Economics & Finance
Julkaisun pysyvä osoite onhttps://urn.fi/URN:NBN:fi:bof-202002181150
We investigate the effects of bank financing on regional entrepreneurial activities in China. We present contrasting findings on the role of quantity vs. quality of bank financing on small business formation in China: while we document a consistent, significantly positive relationship between the quality of bank financing and new venture formation, we find that the quantity of supplied credit is insignificant. We report that formal institutions are positively correlated to regional entrepreneurial activities, and informal institutions substitute formal institutions. Our findings also reveal that the institutional environment tends to supplement bank financing in promoting regional entrepreneurial activities.