scholarly journals Empowering Cities: Good for Growth? Evidence from the People's Republic of China

2018 ◽  
Vol 35 (1) ◽  
pp. 175-195
Author(s):  
Megha Mukim ◽  
T. Juni Zhu
Keyword(s):  
Gross Domestic Product ◽  
Local Governments ◽  
Credit Constraints ◽  
High Capacity ◽  
Economic Outcomes ◽  
Firm Level ◽  
Access To Credit ◽  
Republic Of China ◽  
Firm Outcomes ◽  
Local Leaders

This paper utilizes a countrywide process of county-to-city upgrading in the 1990s to identify whether extending the powers of urban local governments leads to better firm outcomes. The paper hypothesizes that since local leaders in newly promoted cities have an incentive to utilize their new administrative remit to maximize gross domestic product and employment, there should be improvements in economic outcomes. In fact, aggregate firm-level outcomes do not necessarily improve after county-to-city graduation. However, state-owned enterprises perform better after graduation, with increased access to credit through state-owned banks as a possible explanation. Importantly, newly promoted cities with high capacity generally produce better aggregate firm outcomes compared with newly promoted cities with low capacity. The conclusions are twofold. First, relaxing credit constraints for firms could lead to large increases in their operations and employment. Second, increasing local government's administrative remit is not enough to lead to better firm and economic outcomes; local capacity is of paramount importance.

Productivity and credit constraints: A firm-level propensity score evidence for agricultural farms in central and east European countries

2012 ◽  
Vol 62 (4) ◽  
pp. 459-487 ◽  
Author(s):  
Pavel Ciaian ◽  
Jan Fałkowski ◽  
D’Artis Kancs
Keyword(s):  
Capital Investment ◽  
Credit Constraints ◽  
Factor Productivity ◽  
Firm Level ◽  
Data Set ◽  
East European ◽  
Access To Credit ◽  
Negative Effect ◽  
Matching Estimator ◽  
Farm Efficiency

Drawing on a unique farm level panel data set with 37,409 observations for period 2004–2005 and employing a matching estimator, this paper analyses how farm access to credit affects farm input allocation and farm efficiency in the CEE transition countries. We find that farms are asymmetrically credit constrained with respect to inputs. Farm use of variable inputs and capital investment increases up to 2.3% and 29%, respectively, per 1000 EUR of additional credit. Our estimates suggest also that farm access to credit increases the total factor productivity up to 1.9% per 1000 EUR of additional credit, indicating that an improved access to credit results in adjusting the relative input intensities on farms. This finding is further supported by a negative effect of better access to credit on labour, suggesting that these two are substitutes. Interestingly, farms are found not to be credit constrained with respect to land.

scholarly journals Off-farm Income, Credit Constraints, and Farm Investment

2020 ◽  
Vol 52 (4) ◽  
pp. 642-663
Author(s):  
Nigel Key
Keyword(s):  
Household Income ◽  
Credit Constraints ◽  
Limited Resource ◽  
Capital Expenditures ◽  
Farm Income ◽  
Farm Labor ◽  
Federal Programs ◽  
Net Worth ◽  
Access To Credit ◽  
Farm Investment

AbstractMany farmers face borrowing limits that depend on their household income and net worth. Given such credit constraints, an increase in off-farm income should allow farmers to borrow more, thus influencing production decisions and productivity. To test this hypothesis, the education level of the farm operator’s spouse is used to identify exogenous variation in off-farm income. Findings indicate that higher off-farm income leads to more borrowing, capital expenditures, capital input intensity, farm labor use, output, farm income, and productivity. Results suggest that Federal programs that promote access to credit for limited-resource farmers may increase farm investment and productivity.

scholarly journals Foreign Capital, Real Sector Financing and Excessive Leverage in Turkey: What Went Wrong?

2020 ◽  
Vol 10 (1) ◽  
pp. 30-39
Author(s):  
Bahadır Karakoç
Keyword(s):  
Foreign Capital ◽  
Financial Sector ◽  
Economic Conditions ◽  
Real Sector ◽  
Contributing Factors ◽  
Firm Level ◽  
Access To Credit ◽  
Debt Burden ◽  
Heavy Burden ◽  
Stock Market Trading

Recently, large swings in inflation and exchange rates revealed that non-financial sector is heavily geared and extremely vulnerable. Therefore, a study trying to identify the contributing factors is needed. Separating firms into groups, based on size and stock market trading status; changes in financing patterns are investigated via panel data methodology. The study aims at fulfilling the need for analyzing the consequences of foreign capital flow at firm level and documenting its significance in addition to assessing the efficacy of contemporary monetary policy. Economic conditions significantly facilitated lending process, strengthening corporate access to credit, and resulted in excessive borrowing both in the form of foreign and domestic currency. With such heavy burden of debt, non-financial sector has been facing both exchange rate and the liquidity risks. The more severely a firm was previously challenged by financing limitations, the more it borrowed once the limitations are relaxed, contributing to excessive debt burden of the economy in proportion to its previous financing challenges.

scholarly journals Production Efficiency Analysis of the Hungarian Meat Processing Industry

Competitio ◽  
2015 ◽  
Vol 14 (1) ◽  
pp. 23-42
Author(s):  
Zombor Berezvai
Keyword(s):  
Financial Crisis ◽  
Production Efficiency ◽  
Global Financial Crisis ◽  
High Capacity ◽  
Function Estimation ◽  
Meat Processing ◽  
Firm Level ◽  
Processing Industry ◽  
Market Situation ◽  
The Global Financial Crisis

This paper analyzes the performance of the Hungarian meat processing industry in the wake of the global financial crisis. Between 2011 and 2013 many high-capacity meat processors went bankrupt in Hungary. Possible reasons for that could be unfavorable market situation and inefficiency in production. In this paper, the latter hypothesis is examined. Two different types of production function estimation techniques are used to calculate firm-specific inefficiency estimates. Based on the estimation results, the lower bound of average firm-level efficiency is 0.50, while the upper bound is 0.88. Estimated firm-level inefficiencies are compared to the characteristics of the given firms. Pre-tax profit, company size and domestic ownership are associated with lesser inefficiency. On the other hand, time trend of inefficiencies indicate that the global financial crisis negatively affected the production efficiency of the meat processors. This can be a reason behind the bankruptcies happened. Journal of Economic Literature (JEL) codes: C33, L66

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