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Finance And Enterprise Performance: Does Ethnicity Make A Difference?

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  • SUN, JUNFANG
  • YANO, GO

Abstract

Using 2004-2007 firm-level micro data for enterprises in Xinjiang Uygur Autonomous Region of China, we investigate the relative importance of bank loans and trade credit in promoting enterprise performance. We find statistical evidence that access to bank loans plays a significant role in improving enterprise productivity, but it has a significantly negative impact on profitability; the result continues to hold when taking into account the ethnicity effect. Moreover, there is no evidence of an ethnicity gap for the effect of receiving bank loans on enterprise performance. We also cannot find strong evidence that trade credit influences productivity or profitability.

Suggested Citation

  • Sun, Junfang & Yano, Go, 2015. "Finance And Enterprise Performance: Does Ethnicity Make A Difference?," Hitotsubashi Journal of Economics, Hitotsubashi University, vol. 56(2), pages 197-212, December.
    • Handle: RePEc:hit:hitjec:v:56:y:2015:i:2:p:197-212
    DOI: 10.15057/27596
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    References listed on IDEAS

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    More about this item

    Keywords

    bank loans; trade credit; enterprise performance; ethnic enterprise; Han enterprise;
    All these keywords.

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements

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