The Belt and Road Initiative and Financing Constraint for Chinese Enterprises*

Xu Si (徐思)1, He Xiaoyi (何晓怡)2 and Zhong Kai (钟凯)3
1, 2 School of Economics and Management, South China Normal University (SCNU), Guangzhou, China
3 International Business School, University of International Business and Economics (UIBE), Beijing, China

Abstract: In the context of China’s proactive implementation of the Belt and Road Initiative (BRI), unraveling the BRI’s effect on corporate behavior is of vital importance to China’s policymaking on overseas investment. With the BRI’s enactment as a quasi-natural experiment, this paper employs the difference in differences (DID) method to investigate the BRI’s effect on the financing constraint for Chinese enterprises. Our study finds that the BRI’s implementation has significantly reduced financing constraints for BRI enterprises, and the effect is more significant for emerging advantageous industries and export-oriented node cities.

Keywords: the Belt and Road Initiative (BRI), financing constraint, government support, financing cost, quasi-natural experiment
JEL Classification Codes: G22, G32, G38
DOI:1 0.19602/j .chinaeconomist.2019.11.07

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