The SOE Channel of Monetary Policy Transmission: Evidence from China's Economic Stimulus Package

We examine the state-owned enterprises (SOEs) channel in monetary policy transmission in the context of China's 2008 stimulus package. Using a difference-in-difference approach, we show that the higher SOE share in the cities after the stimulus package, the more bank loans issued in the cities....

Full description

Saved in:
Bibliographic Details
Published in:Asian economic papers 2021-11, Vol.20 (3), p.73-93
Main Authors: Chen, Wenbin, Han, Shi-Zhuan, Li, Jie, Zhou, Tianhang
Format: Article
Language:English
Subjects:
Bank loans
Cities
Monetary policy
Public enterprise
Citations: Items that this one cites
Items that cite this one
Online Access:Get full text
Tags: Add Tag
No Tags, Be the first to tag this record!
Description
Summary:We examine the state-owned enterprises (SOEs) channel in monetary policy transmission in the context of China's 2008 stimulus package. Using a difference-in-difference approach, we show that the higher SOE share in the cities after the stimulus package, the more bank loans issued in the cities. Furthermore, we find that the role of SOEs in monetary policy transmission is more significant in underdeveloped cities and cities with a high level of government intervention. We adopt propensity score matching difference-in-difference to deal with potential endogeneity problem. The baseline results also survive a series of robustness tests.
ISSN:1535-3516
1536-0083
DOI:10.1162/asep_a_00836