Research Repository

See what's under the surface

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.

Journal Article Type Article
Publication Date Feb 12, 2014
Journal Journal of Banking & Finance
Print ISSN 1034-3040
Electronic ISSN 0378-4266
Publisher Thomson Reuters
Peer Reviewed Peer Reviewed
Volume 48
Institution 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
DOI https://doi.org/10.1016/j.jbankfin.2014.01.036
Keywords Foreign direct investment; Knowledge spillovers; Credit constraints; China
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

Files

Credit_Constrains_and_Spillovers_from_Foreign_Firms_in_China.pdf (496 Kb)
PDF

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




Downloadable Citations