Property Rights Protection and Access to Bank Loans: Evidence from Private Enterprises in China

Type:
SCID Working Paper 281

Author(s):

Published:
05/1/06

Region:
China

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Abstract:
Poor protection of private properties has limited the access to bank loans by private enterprises in developing and transition economies. Under those circumstances, private entrepreneurs have resorted to various ways of enhancing the de facto protection of private properties. Using a data set of 3,073 private enterprises in China, this paper empirically investigates the impacts of political participation and philanthropic activities—informal substitutes for the lack of formal protection of private properties—on the access to bank loans.