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Law, finance, and economic growth in China
Journal of Financial Economics Volume 77, Issue 1, July 2005, Pages 57–116
Franklin Allen,Jun Qian, Meijun Qian
Abstract
China is an important counterexample to the findings in the law, institutions, finance, and growth literature: Neither its legal nor financial system is well developed, yet it has one of the fastest growing economies. While the law–finance–growth nexus applies to the State Sector and the Listed Sector, with arguably poorer applicable legal and financial mechanisms, the Private Sector grows much faster than the others and provides most of the economy's growth. The imbalance among the three sectors suggests that alternative financing channels and governance mechanisms, such as those based on reputation and relationships, support the growth of the Private Sector.
Keywords
Law and finance; Economic growth; Private sector; Corporate governance; Reputation and relationships

Law, finance, and economic growth in China

 

Journal of Financial Economics Volume 77, Issue 1, July 2005, Pages 57–116

 Franklin Allen,Jun Qian, Meijun Qian

 

Abstract

 

China is an important counterexample to the findings in the law, institutions, finance, and growth literature: Neither its legal nor financial system is well developed, yet it has one of the fastest growing economies. While the law–finance–growth nexus applies to the State Sector and the Listed Sector, with arguably poorer applicable legal and financial mechanisms, the Private Sector grows much faster than the others and provides most of the economy's growth. The imbalance among the three sectors suggests that alternative financing channels and governance mechanisms, such as those based on reputation and relationships, support the growth of the Private Sector.

 

Keywords

 

 Law and finance; Economic growth; Private sector; Corporate governance; Reputation and relationships

 

Law, finance, and economic growth in China.pdf