Bank Loans with Chinese Characteristics: Some Evidence on Inside Debt in a State-Controlled Banking System

By Warren Bailey, Wei Huang, Zhishu Yang. Journal of Financial and Quantitative Analysis, 2011

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Finance and Growth for Microenterprises: Evidence from Rural China (2015, unknown): “Formal finance does not enhance the microenterprises with eight or more employees due to inefficient bank loans in China (Bailey et al., 2011); neither does for those self-employed due to a lack of incentive of entrepreneurs for expansion.”
Does Infrastructure Investment Lead to Economic Growth or Economic Fragility? Evidence from China (2016, unknown): “…state-owned enterprises (SOEs)—many of which have been involved in building infrastructure—are the dominant corporate borrowers and continue to receive preferential access to debt (Allen et al. , 2005; Chen et al. , 2011; Yueh, 2011; Bailey et al. , 2012; Cull et al. , 2015; Deng et al. , 2015).”
New Varieties of State Capitalism: Strategic and Governance Implications (2015, background): “This phenomenon was illustrated in research by Bailey, Huang, and Yang (2011) and Khwaja and Mian (2005), who found that loans from state-owned banks tend to target poorly performing firms in China and Pakistan, respectively.”
GDP management to meet or beat growth targets (2018, unknown): “Moreover, virtually all commercial banks are state-owned, and local governments have considerable influence on banks’ lending behavior (Bailey et al., 2011; Dinc, 2005).”