THE SIAMESE TWINS - DO STATE-OWNED BANKS FAVOR STATE-OWNED ENTERPRISES IN CHINA

Authors
Citation
Sj. Wei et T. Wang, THE SIAMESE TWINS - DO STATE-OWNED BANKS FAVOR STATE-OWNED ENTERPRISES IN CHINA, China economic review, 8(1), 1997, pp. 19-29
Citations number
18
Categorie Soggetti
Economics
Journal title
ISSN journal
1043951X
Volume
8
Issue
1
Year of publication
1997
Pages
19 - 29
Database
ISI
SICI code
1043-951X(1997)8:1<19:TST-DS>2.0.ZU;2-G
Abstract
Using city-level data over 1989-1991, we find relatively clear evidenc e that China's bank loans favor state-owned industrial enterprises. Us ing a simple model, we argue that the lending bias diminishes the effe ctiveness of other measures designed to promote the growth of non-stat e sectors or to induce SOEs to restructure. A policy implication of th e study is that the reform of the banking sector, in particular, its l ending policy should be implemented simultaneously with the reforms of state-owned industrial enterprises.