Provincial official turnover and bank loans

Chunfang Cao, Yizhe Dong, Wenxuan Hou, Yue Liu, Xianhang Qian

Research output: Contribution to journalArticlepeer-review

Abstract / Description of output

Based on the turnover data of provincial party committee secretaries in China between 2000 and 2008, we find that the loan increment of local SOEs (state-owned enterprises) decreases by 18.9% in turnover years. We also document increased efficiency of long-term loans in turnover years. The effects of provincial leader turnover on bank loans only exist for local SOEs in eastern regions. Local officials have less of a political incentive to exert influence on bank credit allocation in turnover years, and therefore banks act as more effective intermediaries in optimizing credit allocation and improving the efficiency of loans.
Original languageEnglish
Article number101202
JournalPacific-Basin Finance Journal
Early online date27 Aug 2019
Publication statusPublished - Oct 2019

Keywords / Materials (for Non-textual outputs)

  • political turnover
  • bank loans
  • credit allocation efficiency
  • local SOEs


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