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Stafford says exiting down stock market worsened position of low-income households

Bailey's work cited on growing income disparities in college enrollment and graduation

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Highlights

PSC Fall 2014 Newsletter now available

Martha Bailey and Nicolas Duquette win Cole Prize for article on War on Poverty

Michigan's graduate sociology program tied for 4th with Stanford in USN&WR rankings

Jeff Morenoff makes Reuters' Highly Cited Researchers list for 2014

Next Brown Bag

Monday, Nov 3
Melvin Stephens, Estimating Program Benefits

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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