Interest Rate Liberalization and Firm Leverage in China: Effects and Channels
Table 14
Total leverage of loss making firms versus profitable firms during the liberalization period.
Total firms
SOEs
Non-SOEs
SOEs
Non-SOEs
(1)
(2)
(3)
(4)
(5)
(6)
Irlib1
−0.4648
−0.2282
−0.6627
(−8.39)
(−2.95)
(−8.45)
Irlib2
−0.3646
−0.1498
−0.5465
(−10.57)
(−2.98)
(−11.24)
Loss
0.3585
0.2191
0.1835
0.4610
0.1115
0.2820
(5.27)
(5.29)
(2.45)
(5.89)
(2.49)
(5.83)
Irlib1 × loss
−0.3819
−0.1742
−0.4988
(−4.21)
(−1.70)
(−4.84)
Irlib2 × loss
−0.1902
−0.0744
−0.2554
(−3.57)
(−1.25)
(−4.21)
Controls
Yes
Yes
Yes
Yes
Yes
Yes
Constant
0.4574
2.1004
−0.3308
1.5261
−0.1363
4.2299
(0.48)
(2.18)
(−0.24)
(1.18)
(−0.10)
(3.25)
Industry/city
Yes
Yes
Yes
Yes
Yes
Yes
N
17956
17956
8182
9774
8182
9774
Adj-R2
0.1495
0.1496
0.1697
0.1648
0.1698
0.1650
Diff (p-value)
0.0822
0.0995
Note. ,, and indicate statistical significance at 1 percent, 5 percent, and 10 percent, respectively. Two alternative measures of interest rate liberalization are used in Table 13. The t-statistics are in parentheses, we calculate them on the basis of standard errors that are robust to heteroscedasticity.
