The Impact of "One Belt and One Road" Policy on Corporate Financing Constraints

Abstract

This paper takes the introduction of the "One Belt and One Road" policy as a quasi-natural experiment, based on the data of A-share listed companies in Shanghai and Shenzhen from 2011 to 2016, and uses the Difference Inequality Method to investigate the impact of the "One Belt and One Road" policy on corporate financing constraints and its action path. The benchmark regression results show that the implementation of the "One Belt and One Road" policy significantly reduces the financing constraints of enterprises supported by the policy. After controlling for possible endogeneity problems by using the placebo test, this conclusion still holds. In addition, this paper also conducts grouping tests according to the industry characteristics of enterprises, and the results show that the mitigation effect of the "One Belt and One Road" policy on the financing constraints of enterprises is more significant in the high-tech industry. The analysis of the action mechanism shows that, on the one hand, compared with the enterprises not affected by the policy, the enterprises supported by the policy have more external financing and bank borrowing increments; on the other hand, compared with the enterprises not affected by the policy, the enterprises supported by the policy have lower bank borrowing financing costs and corporate bond financing costs, and more tax benefits. The study shows that the implementation of the "One Belt and One Road" policy mainly reduces corporate financing constraints through two channels: financing sources and operating costs. This finding not only helps to expand the research framework of macroeconomic policy and micro-enterprise behavior, but also has certain enlightenment for the in-depth understanding of the economic effects of the "Belt and Road" policy and the follow-up reform.