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PSC newsletter spring 2014 issue now available

Kusunoki wins faculty seed grant award from Institute for Research on Women and Gender

2014 PAA Annual Meeting, May 1-3, Boston

USN&WR ranks Michigan among best in nation for graduate education in sociology, public health, economics

Next Brown Bag

Monday, April 21
Grant Miller: Managerial Incentives in Public Service Delivery

Joint Liability Lending and the Rise and Fall of China's Township and Village Enterprises

Publication Abstract

Park, Albert F., and M.G. Shen. 2003. "Joint Liability Lending and the Rise and Fall of China's Township and Village Enterprises." Journal of Development Economics, 71(2): 497-531.

We present a new explanation for the rise and fall of collectively owned enterprises based on the changing lending preferences of banks. Until the mid-1990s, bank loans to collective firms exhibited the key features of joint liability lending, supported by the sanctioning ability of local government leaders. However, subsequent changes in collateral, firm performance, interest rates and financial competition led banks to prefer individual lending to private firms. This explanation is supported by empirical analysis of the determinants of bank lending preferences, the involvement of township leaders in lending and the ability of firms to obtain loans. (C) 2003 Elsevier Science B.V. All rights reserved.

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