Financing Constraints and the Amplification of Aggregate           Downturns

The key to transforming China’s economy from high-speed growth to high-quality development is to improve total factor productivity (TFP). Based on the panel data of China’s listed companies participating in PPP (Public–Private Partnerships) projects from 2010 to 2019, this paper constructs the time-varying DID method to test the impact of participation in PPP projects on the company’s TFP empirically, explore the mechanism of the effect of participation in PPP projects on the company’s TFP, and then conduct heterogeneous analysis from four perspectives: region, industry, ownership form, and operation mode. The empirical results show that participation in PPP projects can significantly promote the growth of the company’s TFP, which mainly comes from the promotion of the innovation level of listed companies and the alleviation of financing constraints by participating in PPP projects. In addition, participation in PPP projects has a significant impact on TFP of listed companies in the eastern region, listed companies in the secondary and tertiary industries, state-owned listed companies, and listed companies participating in PPP projects under the BOT mode.

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Do the Green Credit Guidelines Affect Corporate Green Technology Innovation? Empirical Research from China

International Journal of Environmental Research and Public Health ◽

10.3390/ijerph18041682 ◽

2021 ◽

Vol 18 (4) ◽

pp. 1682

Author(s):

Min Hong ◽

Zhenghui Li ◽

Benjamin Drakeford

Keyword(s):

Technology Innovation ◽

Green Technology ◽

Debt Financing ◽

Financing Constraints ◽

Difference Model ◽

Financing Constraint ◽

Important Means ◽

Regulatory Commission ◽

The Impact ◽

Innovation Policies

Green technology innovation is regarded as an important means to achieve sustainable development. Countries all over the world mainly implement green technology innovation policies from the aspects of environmental regulation and financing constraints. The effect of financing constraint policy on enterprise green technology innovation remains to be investigated. Based on the event of “green credit guidelines” issued by China Banking Regulatory Commission in 2012, this paper collects the panel data of China’s 2825 listed companies from 2007 to 2018, constructs a difference-in-difference model, and studies the impact of green credit guidelines on corporate green technology innovation and its mechanism. The empirical results show: First, green credit guidelines can promote corporate green technology innovation on the whole. Second, the mechanism of green credit on enterprise green technology innovation is identified. Green credit guidelines mainly limited green technology innovation through reducing debt financing, rather than through financing constraints. Third, the impact of green credit guidelines on green technology innovation is heterogeneous. Green credit guidelines have a significant effect on the green technology innovation of state-owned and large enterprises, but have no effect on the green technology innovation of non-state-owned and small ones.

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The Strategic Behavior of Firms with Debt

Journal of Financial and Quantitative Analysis ◽

10.1017/s0022109016000673 ◽

2016 ◽

Vol 51 (5) ◽

pp. 1611-1636 ◽

Cited By ~ 1

Author(s):

Jérôme Reboul ◽

Anna Toldrà-Simats

Keyword(s):

Small Firms ◽

Strategic Behavior ◽

Financing Constraints ◽

Large Firms ◽

Market Shares ◽

Probability Of Bankruptcy ◽

The Difference

We empirically study the strategic behavior of levered firms in competitive and noncompetitive environments. We find that regulation induces firms to increase leverage, and this reduces their ability to compete when deregulation occurs. Large and small levered firms adopt different strategies upon deregulation. Whereas more levered small firms charge higher prices to increase margins at the expense of market shares, highly levered large firms prey on their rivals by increasing output and reducing prices to increase their market shares. The difference in their behavior is due to differences in their probability of bankruptcy and their financing constraints.

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