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Credit constraints and spillovers from foreign firms in China

Agarwal, Natasha; Milner, Chris; Riaño, Alejandro

Authors

Natasha Agarwal agarwana3@gmail.com

Chris Milner chris.milner@nottingham.ac.uk

Alejandro Riaño alejandro.riano@nottingham.ac.uk



Abstract

This paper examines whether credit constraints affect Chinese firms’ absorption of productivity spillovers originating from the activity of foreign-owned firms. Using firm-level data for 2001–2005, we find evidence of positive spillovers originating from foreign-owned firms from countries other than Hong Kong, Macau and Taiwan for non-state owned Chinese firms operating in the same industry and province. Using an index of external finance dependence to measure credit constraints, we find that only non-state-owned firms operating in industries with external finance dependence below the index median exhibit significantly positive spillovers from the activity of foreign firms.

Citation

Agarwal, N., Milner, C., & RiaƱo, A. (2014). Credit constraints and spillovers from foreign firms in China. Journal of Banking & Finance Law and Practice, 48, doi:10.1016/j.jbankfin.2014.01.036

Journal Article Type Article
Publication Date Feb 12, 2014
Deposit Date Sep 8, 2015
Publicly Available Date Sep 8, 2015
Journal Journal of Banking & Finance
Print ISSN 1034-3040
Electronic ISSN 0378-4266
Publisher Thomson Reuters
Peer Reviewed Peer Reviewed
Volume 48
DOI https://doi.org/10.1016/j.jbankfin.2014.01.036
Keywords Foreign direct investment; Knowledge spillovers; Credit constraints; China
Public URL http://eprints.nottingham.ac.uk/id/eprint/29843
Publisher URL http://www.sciencedirect.com/science/article/pii/S0378426614000508
Copyright Statement Copyright information regarding this work can be found at the following address: http://creativecommons.org/licenses/by-nc-nd/4.0

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Copyright Statement
Copyright information regarding this work can be found at the following address: http://creativecommons.org/licenses/by-nc-nd/4.0





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