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Official Visit, Bank Credit and Maturity Mismatch: Evidence from Chinese Listed Firms

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  • Bai Yunxia
  • Muqing Qiu

Abstract

It is becoming increasingly common in recent years that Chinese government officials visit companies on site and the news about this spread widely on the Internet. Official visits can bring various benefits to companies in China, where the government still plays an important role in allocating economic resources, including bank credit. Based on the data of officials’ visits to Chinese listed firms during 2006–2019, this paper finds that firms’ access to short-term bank loans increases significantly after officials’ visits, which, in turn, significantly enhance the degree of maturity mismatch. Furthermore, the paper finds that the stock market reacts negatively to the maturity mismatch. However, firms’ stock return is discounted less for maturity mismatch both in short and long term when firms are visited by officials. The findings in this paper are helpful in profoundly understanding China’s economic system and Chinese government–enterprise relationship.

Suggested Citation

  • Bai Yunxia & Muqing Qiu, 2021. "Official Visit, Bank Credit and Maturity Mismatch: Evidence from Chinese Listed Firms," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 57(15), pages 4361-4379, December.
    • Handle: RePEc:mes:emfitr:v:57:y:2021:i:15:p:4361-4379
    DOI: 10.1080/1540496X.2020.1810013
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    Citations

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    Cited by:

    1. Xu, Meng & Yang, Zhonghai & Lin, Yu-En & Li, Gaobo, 2024. "Maturity mismatched investment, digital financial inclusion, and digital orientation: Evidence from China," International Review of Financial Analysis, Elsevier, vol. 91(C).
    2. Li, Jingxin & Ye, Yong & Li, Jingxuan, 2024. "Performance feedback and corporate maturity mismatch: Evidence from China," Research in International Business and Finance, Elsevier, vol. 67(PB).
    3. Qianbin Feng & Lexin Zhao & Mingxue Xu, 2023. "Tax Incentives and Maturity Mismatch between Investment and Financing: Evidence from China," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 31(4), pages 1-36, July.
    4. Hu, Mingsheng & Li, Bowen, 2024. "Potential risks in the easy market access: A perspective from corporate asset-debt maturity mismatch," Research in International Business and Finance, Elsevier, vol. 70(PA).
    5. Wen, Huwei & Liu, Yupeng & Lee, Chien-Chiang, 2024. "How ESG performance affects maturity mismatches between investment and financing: Evidence from Chinese A-share listed companies," Research in International Business and Finance, Elsevier, vol. 71(C).
    6. Li, Bo & Cheng, Yue & Tian, Guangning, 2024. "Bank competition and firm asset- debt maturity mismatch: Evidence from the SMEs in China," Research in International Business and Finance, Elsevier, vol. 69(C).
    7. Wang, Qi & Wu, Cisheng, 2024. "How does the marketization of public resources alleviate corporate credit mismatches?," Finance Research Letters, Elsevier, vol. 62(PB).

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