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Credit corruption, financial constraint and corporate innovation: Evidence on China

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  • Zhao, Meiyu
  • Zhang, Bo

Abstract

This paper investigates the casual effects of credit corruption and financial constraints on firms' innovation activities, by using a unique data from the 2012 World Bank micro survey on Chinese firms. The results show that both the credit corruption and financial constraints significantly inhibit corporate innovation, and the financial constraints have more pronounced inhibitory effect on the innovation in firms with credit corruption. In addition, the credit corruption reinforces the inhibitory effect of financial constraints on the innovation in SMEs, private firms, capital-intensive firms, and firms with lower regional financial development.

Suggested Citation

  • Zhao, Meiyu & Zhang, Bo, 2023. "Credit corruption, financial constraint and corporate innovation: Evidence on China," Finance Research Letters, Elsevier, vol. 53(C).
    • Handle: RePEc:eee:finlet:v:53:y:2023:i:c:s1544612323000326
    DOI: 10.1016/j.frl.2023.103658
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    References listed on IDEAS

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    Cited by:

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    5. Yang, Tingting & Xu, Botong, 2023. "Incentive effects of government subsidy on technological innovation: Evidence from pharmaceutical industry," Finance Research Letters, Elsevier, vol. 55(PA).
    6. Razzaq, Asif & Sharif, Arshian & Yang, Xiaodong & Dogan, Eyup, 2024. "Influence mechanism of electricity price distortion on industrial green transformation: A spatial analysis of Chinese regions," Energy Economics, Elsevier, vol. 130(C).
    7. Li, Quan & Chen, Huimin & Chen, Yang & Xiao, Tong & Wang, Li, 2023. "Digital economy, financing constraints, and corporate innovation," Pacific-Basin Finance Journal, Elsevier, vol. 80(C).
    8. Nguyen, Hieu Quang, 2023. "Corruption, political connection, and firm investments," International Review of Financial Analysis, Elsevier, vol. 90(C).
    9. Huang, Jiacheng & Ma, Li, 2024. "Substantive green innovation or symbolic green innovation: The impact of fintech on corporate green innovation," Finance Research Letters, Elsevier, vol. 63(C).
    10. Rui, Linlin & Sun, Wenyan & Xu, Fangyuan, 2024. "The impact of bank credit corruption on firms' carbon emission reduction innovations: Empirical evidence from China," Finance Research Letters, Elsevier, vol. 60(C).

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