The survey has data on financing choices for approximately 2400 firms across 18 totally different cities. While a lot of the qualitative questions pertain solely to the 12 months 2002, a brief panel from 1999 to 2002 is accessible for the quantitative questions. Strength of the survey is in broad protection of small and medium sized firms The corporations are randomly surveyed from each manufacturing and providers industries with a restriction on minimum firm dimension where agency measurement is defined by variety of workers. The minimum variety of staff was set at 20 for manufacturing corporations, and at 15 employees for providers companies. Slide 7 World Bank Access to Finance Conference, March 2007 1.Haerbin 3.Benxi 2.Changchun 4.Dalian 7.Shenzhen 9.Zhengzhou 16.Nanning 17.Lanzhou 14.Guiyang 13.Chongqing 15.Kunming 18.Xian 11.Nanchang 5.Hangzhou 10.Wuhan 6.Wenzhou Beijing 8.Jiangmen Cities in China coated by ICA Survey 12.Changsha Ranking of Cities by their Investment Climate (Source: Dollar et al. Slide eight World Bank Access to Finance Conference, March 2007 Additional Data As of 2006, there have been 67 nation surveys covering over 40000 firms.

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Slide sixteen World Bank Access to Finance Conference, March 2007 The explanation why loan software was rejected Slide 17 World Bank Access to Finance Conference, March 2007 Selection Model and Identifying Restriction We use Collateral as our figuring out variable. 1 if firm reported sure to the question Did the financing require collateral zero if agency reported no to the question Did the financing require collateral OR 0 If agency reported it didn't apply for a mortgage because collateral requirements have been too stringent OR 0 if firm reported its software for a mortgage was rejected How contingent are our outcomes on the way Collateral is defined? We perform robustness checks utilizing Propensity Score Matching: Don't want to make use of collateral as an figuring out variable Also use fixed assets in place of collateral variable. Slide 18 World Bank Access to Finance Conference, March 2007 Bank Financing and Firm Performance Selection Model Slide 19 World Bank Access to Finance Conference, March 2007 Selection Model Robustness Expanded Selection Model Variables to proxy for Government Help variables, Bank Corruption, Property Rights Protection, Loan from Group or Holding Company, Loan Guarantee Program, Located in Export Processing Zone, CEO Education Level, Politically Connected CEO Broader measure of access to bank finance Access Dummy, takes the worth 1 if the agency had access to a bank mortgage in any 12 months prior, from 1990-2001, and 0 otherwise. Content has been c᠎reated  with the  help of GSA Content᠎ G​ener ator  DEMO᠎!

17 entrepreneurs and executives in Zhejiang and Jiangsu provinces, two of the most developed regions in China Slide 4 World Bank Access to Finance Conference, March 2007 In this paper: Does the informal sector act in its place to the formal monetary system and finance the fastest rising corporations or does the informal sector primarily serve the lower finish of the market? To answer this question, we proceed in steps: Are Chinese corporations financing patterns different in comparison with other nations? How do formal and informal financing patterns vary throughout several types of corporations in different cities and areas? How are bank finance and financing from informal sources associated with agency gross sales growth productiveness progress profit reinvestment.. Slide 5 World Bank Access to Finance Conference, March 2007 The context Formal organizational construction, the authorized system and performance Demirguc-Kunt, Love and Maksimovic (2006), Beck, Demirguc-Kunt and Maksimovic (2005) Chinese financial system Cull and Xu (2005), Cull, Xu and Zhu (2007), Dollar, Wang, Xu and Shi (2004), Farrell et al (2006), Fan, Morck, Xu and Yeung (2006) Financial system and development Guiso, Sapienza, and Zingales (2002), Bertrand, Schoar, and Thesmar (2004) Slide 6 World Bank Access to Finance Conference, March 2007 Data Investment Climate Survey, a major firm degree survey carried out in China in 2003 and led by the World Bank.

Because the core survey instrument is similar throughout all nations, we've got comparable data on financing sources across the totally different nations. Slide 9 World Bank Access to Finance Conference, March 2007 Methodology 1.Correlations --- what is the position of bank financing on development, reinvestment, productiveness? 2.Selection mannequin: controls for the endogeneity of entry to financial institution loans 3.Matching mannequin: controls for matches based on observables using propensity scores. Slide 10 World Bank Access to Finance Conference, March 2007 How completely different is China? China vs. Other Developing Countries Slide eleven World Bank Access to Finance Conference, March 2007 How totally different is China? Bank Dummy: 1 if the firm states that is has a mortgage from a bank or financial establishment 0 if the agency states that it has no financial institution mortgage and no overdraft facility or line of credit score OLS Regressions with clustered customary errors. Slide 14 World Bank Access to Finance Conference, March 2007 Bank Financing and Firm Performance Partial Correlations Slide 15 World Bank Access to Finance Conference, March 2007 Selection Model Two step selection mannequin (Heckman, 1978) that enables prediction of which corporations obtain financial institution finance.