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The role of government intervention in financial development: micro‐evidence from China
Author(s) -
Feng Lingbing,
Fu Tong,
Apergis Nicholas,
Tao Hu,
Yan Wu
Publication year - 2019
Publication title -
accounting and finance
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.645
H-Index - 49
eISSN - 1467-629X
pISSN - 0810-5391
DOI - 10.1111/acfi.12559
Subject(s) - endogeneity , economic interventionism , government (linguistics) , business , china , intervention (counseling) , state (computer science) , finance , affect (linguistics) , economics , public economics , political science , psychology , linguistics , philosophy , algorithm , psychiatry , politics , computer science , law , econometrics
This paper distinguishes between different forms of government intervention upon a firm, including the firm’s tax burden, sales to the government and state shares. We investigate how these types of government intervention affect micro‐financial development. With evidence from China, we confirm that the micro‐financial development is promoted by the firm’s tax burden and sales to the government but constrained by the firm’s state shares. The findings remain robust to the endogeneity issue. The findings offer applications for government policies or a firm’s financing strategies.