Abstract
This paper examines the impacts of informal and formal institutions on the efficiency of credit resource allocation in the emerging market from the perspective of political connections and marketization. Based on the data of non-state owned listed companies in China, we find that as an informal institution, Political relationship helps companies to obtain more long-term loans. However, from a social perspective, such a credit resource allocation is inefficient because the companies obtaining loans via relationship are more likely to overinvest. Nevertheless, marketization, as a formal institution, helps weakening the impact of relationship on credit resource allocation, improving the efficiency of resource usage.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
