China's Banks in the 1980s

Efficiency of Bank Lending to Small and Medium-Sized State-Owned Enterprises

抄録

To study the efficiency of banks in monitoring small and medium-sized state-owned enterprises (SOEs) in China in the 1980s, we estimate coefficients in various empirical equations for bank finance, firm' s performance and other indicators, using a sample of small and medium-sized SOEs in Guangxi province from 1985 to 1989. We distinguish between the will and ability of banks to monitor borrowers. The results show that banks failed in both the first and second stages of monitoring to those SOEs: the screening process and enforcing repayment of loans. This failure was directly due to inadequate will of the banks to monitor SOEs