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Public credit information arrangements and entrepreneurship: Evidence from China

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  • Fang, Guanfu
  • Gao, Tiantian
  • He, Huanlang
  • Sun, Qian

Abstract

This paper examines how improved public credit information arrangements affect entrepreneurial activities and interact with traditional informal institutions. From 2015 to 2016, the Chinese government implemented a Credit Demonstration City Construction (CDCC) program, which utilized big data technologies to promote credit information sharing and facilitate the usage of public credit information. Using a difference-in-differences approach, we find that the CDCC program improved credit information disclosure and promoted entrepreneurial activities. We provide some evidence for the mechanism that the improved public credit information arrangements alleviated entrepreneurs' credit constraints and lowered the risks of running businesses. In addition, we find that the effects of the CDCC program are stronger in areas where Confucian culture and Buddhism are less prevalent, suggesting that formal and informal institutions may serve complementary functions in promoting entrepreneurship.

Suggested Citation

  • Fang, Guanfu & Gao, Tiantian & He, Huanlang & Sun, Qian, 2023. "Public credit information arrangements and entrepreneurship: Evidence from China," China Economic Review, Elsevier, vol. 81(C).
    • Handle: RePEc:eee:chieco:v:81:y:2023:i:c:s1043951x23001153
    DOI: 10.1016/j.chieco.2023.102030
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