Original scientific paper
https://doi.org/10.1080/1331677X.2021.1931915
The influence of economic institution on finance sector credit allocation in China
Zhao Li
Abstract
Since the supply-side reform, the credit allocation from the
finance sector is more concentrated in state-owned enterprises
(S.O.E.s). It results in a mismatch between the credit allocation
and the economic contribution of private enterprises (P.E.s). In
China, we find that government intervention in the finance sector
to allocate credit to S.O.E.s helps to achieve sustainable growth.
Because of the ownership relationship, the credit allocation to
S.O.E.s will also produce social or political interests for the finance
sector. Based on the stylised facts, this article builds the finance
sector credit allocation dual objective mechanism in the framework of the neoclassical economic growth model. It also analyses
the influence of government intervention and ownership relationship on economic growth in the mixed economy represented by
the socialist market economy with Chinese characteristics. The
empirical analysis found that government intervention and ownership relationship were the main factors affecting the efficiency
of capital allocation. Further research into whether there is an
optimal parameter of government intervention and optimal mixed
proportion in the stated-owned enterprise mixed-ownership
reform is needed.
Keywords
economic institutions; ownership discrimination; capital allocation; economic growth
Hrčak ID:
302017
URI
Publication date:
31.3.2023.
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