Local governments' economic growth target pressure and bank loan loss provision: Evidence from China

Ren, Meixu; Ke, KongLin; Yu, Xin; Zhao, Jinxuan

doi:10.1016/j.iref.2023.04.018

Cited by 12 publications

(2 citation statements)

References 46 publications

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“…As the incidence of loan defaults and bad debts has increased, banks face heightened lending risks, which have necessitated the imposition of restrictions on corporate lending. Against this backdrop, Ren et al observed that to minimize capital loss, banks prefer partnering with socially responsible firms in response to the pressure of economic growth [22]. Similarly, the study by Ho et al examined banks in emerging economies and concluded that they employ non-price terms for credit-risk firms to safeguard their interests [23].…”

Section: Literature Review and Hypothesis Developmentmentioning

confidence: 99%

“…First, this study focused on firms in the energy and environmental protection sector in China, intending to emphasize the representativeness of the sample. Existing studies tend to be country-specific, such as China [22], the United States [37], Japan [14], and Indonesia [40]. Future studies could compare findings from different countries to obtain broader empirical results.…”

Section: Conclusion and Future Researchmentioning

confidence: 99%

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More Green, Better Funding? Exploring the Dynamics between Corporate Bank Loans and Trade Credit

Du,

Li,

et al. 2023

Sustainability

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As a critical aspect of corporate financing strategies, high-quality trade credit has been acknowledged as a favorable indicator for external stakeholders. Given the increasing prominence of sustainable development, it is worthwhile to explore whether an advanced environmental management system facilitates the attainment of financing for business operations. Therefore, to respond to this question, this study utilizes panel data spanning from 2012 to 2021, comprising Chinese listed firms in four energy and environment-related sectors, with the environmental dimension score of the CSI ESG scoring system employed for categorizing the sample into high and low environmental governance groups. The results reconcile the conflicting studies and find an inverted U-shaped effect between trade credit and corporate bank loans with lower levels of environmental governance. Within the domain characterized by higher environmental governance, the two are substituted for each other. In addition, this study introduces the Shapely decomposition method for the first time to quantify the contribution of trade credit to corporate bank loans. Drawing from these findings, we proposed practical advice to firms, financial institutions, and the government on how to choose between bank loans and trade credit against the background of sustainable development.

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Section: Literature Review and Hypothesis Developmentmentioning

confidence: 99%