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Frontiers of Economics in China

Front. Econ. China    2015, Vol. 10 Issue (3) : 509-526     https://doi.org/10.3868/s060-003-014-0022-2
research-article
An Empirical Test of the “Financial Accelerator” in China: Evidence from the Chinese Industrial Enterprises Database
Jie Chen1(),Zhe Li2()
1. School of Economics, Shanghai University of Finance and Economics, Shanghai 200433, China; China (Shanghai) Pilot Free Trade Zone Subbranch, Shanghai Branch, Bank of Communications, Shanghai 200131, China
2. School of Economics and Key Laboratory of Mathematical Economics, Shanghai University of Finance and Economics. Shanghai 200433, China
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Abstract

The purpose of this paper is to test the applicability of the “financial accelerator” mechanism to China. Using the Chinese Industrial Enterprises Database, we find strong evidence suggesting that the employment and investment of leveraged firms are less responsive to aggregate fluctuations. This finding goes against the implications of the “financial accelerator”. To make sure our empirical result is reliable, we have done several robustness checks using different estimation methods and subsamples.

Keywords Financial Accelerator      Leverage      Chinese Industrial Enterprises Database     
Issue Date: 22 October 2015
 Cite this article:   
Jie Chen,Zhe Li. An Empirical Test of the “Financial Accelerator” in China: Evidence from the Chinese Industrial Enterprises Database[J]. Front. Econ. China, 2015, 10(3): 509-526.
 URL:  
http://journal.hep.com.cn/fec/EN/10.3868/s060-003-014-0022-2
http://journal.hep.com.cn/fec/EN/Y2015/V10/I3/509
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