Credit Stimulus, Executive Ownership, and Firm Leverage

• 成果类型: Article
• 署名作者: Chakraborti, Rajdeep; Dahiya, Sandeep; Ge, Lei; Gete, Pedro
• 署名单位: IE University; Georgetown University; Renmin University of China
• 刊物名称: MANAGEMENT SCIENCE
• ISSN/ISSBN: 0025-1909
• DOI: 10.1287/mnsc.2021.4188
• 发表日期: 2022
• 页码: 7682-7700
• 关键词: china; Credit policies; executive ownership; leverage

摘要

We show that executive ownership is a significant driver of the demand for credit following credit expansion policies. Our focus on credit demand is in contrast to most studies that have focused on credit supply factors such as bank capital. Our identification exploits the large and unexpected Chinese credit expansion in 2008. This setting offers a unique advantage as in 2008 the Chinese government had almost complete control over the banking sector and it directed the banks to increase credit supply. Thus, in this setting, demand, rather than supply, largely drives the observed changes in firms' borrowing. We provide extensive robustness tests to validate our results.