State Ownership Corporate and Unsecured Loan:Government Intervention,Implicit Collateral or Information Advantage?
Yuan Chun et al.
Existing literatures show that SOEs in China have credit advantage,and consider that there are mainly two reasons:Firstly,government intervenes in banks' credit decisions; secondly,banks anticipate that government will bail out SOEs in distress.Sampling listed companies with A-share from 2003 to 2005,the paper examine whether and why SOEs have more unsecured loans.We find that:(1) SOEs have more unsecured loans than private firms,and the average difference is about 9%; (2) the difference is smaller when the chair or CEO was a officer; and (3) the difference does not become smaller when corporate collateral value is larger Overall,our results suggest that SOEs' advantage in obtaining unsecured loans mainly results from credit intervention,and we do not provide supporting evidences on implicit collateral theory.
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