Political connections and household access to bank loans: evidence from China

Ekonomska Istraživanja

Robert Lensink¹  Niels Hermes¹  Linyang Li² 

[1] Faculty of Economics and Business, University of Groningen;School of Economics and Management, Northwest University;

关键词: political connections;    household finance;    bank loans;    china;   

DOI  :  10.1080/1331677X.2019.1656099

来源: DOAJ

【 摘 要 】

Using data from a large household survey among 8,438 households in China in 2011, we analyse whether the fact that a household head is a member of a political party in China increases the probability that the household has access to a bank loan. We investigate how these connections influence the decision of households to apply for a bank loan (i.e., the demand side) and the decision of the bank to approve the loan (i.e., the supply side). We show that political connections are positively associated with both the households’ willingness to apply for a loan, as well as with the probability that they get a loan from the bank. We make two contributions to the literature on the determinants of households’ access to credit. We are the first to analyse the role of political connections as a determinant of households’ access to bank loans. Second, we analyse the role of political connections throughout the process of allocating bank loans, i.e., we decompose the loan application process into the households’ self-selection process and bank’s selection process.

【 授权许可】

Unknown