The Impact Of Ownership And Regional Financial Development On Credit Capital Allocation

Enterprise is the main driving force for national economic development, the development of enterprises largely determines the people’s living standards. As the most important means of external financing, the credit exists in the whole process of corporate governance. In China, the main way to get credit funds is bank loans. As the public is the main form of ownership, ownership has a significant impact on the ability of obtaining credit capital for enterprises. At the same time, there are huge differences in the financial developments of different regions in China. In the regions with different levels of financial development, the credit capital allocations of enterprises are possibly different. This article will discuss this problem.In this paper, the disparity in corporate credit capital allocation decisions is the starting point, and in order to achieve in-depth analysis, ownership and the reality of regional finance discrepancies are considered, what’s more, the data of Chinese listed companies in 2008---2011 is used as a sample to study the issues such as the disparity in credit capital allocation of different nature of business ownership and the impact of regional financial development degree on corporate credit capital allocation decisions and the influence of the development of the level of the financial development on the intensity of the ownership controlling the corporate credit capital allocation decisions. Also, theoretical analysis and empirical methods are used to analysis. Using relevant data empirically, the conclusions are as follows:(1) Different enterprises with different ownership have big differences in the credit capital allocation. State-owned enterprises are easier in obtaining credit funds than private ones, especially in long-term credit funds. And the term of credit capital are different between the central state-owned enterprises and the local government-owned ones. The central state-owned enterprises have a stronger ability in obtaining long-term credit funds. (2) The financial developments and the credit capital allocation are in significantly negative relationship. (3) In the regions with higher level of financial development, the impact of ownership on the credit capital allocation is weak. With the improvement of financial development, the differences of credit capital allocation between state-owned enterprises and private ones are significantly reduced.