Industrial Policy, Credit Financing and Corporate Inventory

Abstract

As a way of government intervention in economy, industrial policy has an important impact on the decision-making behavior of enterprises.However, scholars have different views on the role of industrial policy.The article uses 33,154 A-share annual observation samples from 2000 to 2018 as the research object, examines the impact of industrial policies on corporate credit financing, and analyzes the economic consequences of industrial policies affecting credit financing from the perspective of inventory. The research conclusion shows that industrial policies can have an important impact on corporate credit financing. Compared with enterprises that are not supported by industrial policies, enterprises that are supported by industrial policies receive more credit financing; the convenience that industrial policies bring to corporate credit financing can encourage enterprises to expand their production scale, which in turn leads to a backlog of corporate inventories. The article expands the literature system of government macro-control that affects corporate behavior, and helps academics and practitioners to better understand the transmission mechanism of industrial policies affecting the real economy.

Keywords: Industrial Policy; Credit Financing; Inventory; Production

DOI: 10.7176/EJBM/12-17-04

Publication date:June 30th 2020