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Credit Constraints and Spillovers from Foreign Firms in China

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  • Natasha Agarwal
  • Chris Milner
  • Alejandro Riano

Abstract

This paper examines whether credit constraints affect Chinese ï¬ rms' absorption of productivity spillovers originating from the activity of foreign-owned ï¬ rms. Using ï¬ rm-level data for 2001 to 2005, we ï¬ nd evidence of positive spillovers originating from foreign-owned ï¬ rms from countries other than Hong Kong, Macau and Taiwan for non-state owned Chinese ï¬ rms operating in the same industry and province. Using an index of external ï¬ nance dependence to measure credit.

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  • Natasha Agarwal & Chris Milner & Alejandro Riano, 2014. "Credit Constraints and Spillovers from Foreign Firms in China," Discussion Papers 2014/07, University of Nottingham, Centre for Finance, Credit and Macroeconomics (CFCM).
    • Handle: RePEc:not:notcfc:14/07
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    2. Eapen, Alex & Yeo, Jihye & Sasidharan, Subash, 2019. "Finance constraints and technology spillovers from foreign to domestic firms," Economic Modelling, Elsevier, vol. 76(C), pages 50-62.
    3. Heim, Irina & Kalyuzhnova, Yelena & Ghobadian, Abby, 2023. "Win-win strategies for firms operating in resource-abundant countries: Technological spillovers and a collaborative diversification policy," Resources Policy, Elsevier, vol. 83(C).
    4. Vujanović, Nina & Stojčić, Nebojša & Hashi, Iraj, 2021. "FDI spillovers and firm productivity during crisis: Empirical evidence from transition economies," Economic Systems, Elsevier, vol. 45(2).
    5. Man Jin & Huiting Tian & Subal C. Kumbhakar, 2020. "How to survive and compete: the impact of information asymmetry on productivity," Journal of Productivity Analysis, Springer, vol. 53(1), pages 107-123, February.
    6. Fabrice Defever & Alejandro Riaño, 2017. "China’s Dual Export Sector," Discussion Papers 2017-01, University of Nottingham, GEP.

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    More about this item

    Keywords

    Foreign direct investment; knowledge spillovers; credit contraints; China;
    All these keywords.

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • G31 - Financial Economics - - Corporate Finance and Governance - - - Capital Budgeting; Fixed Investment and Inventory Studies
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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