文澜学术系列讲座 第五期

主讲人简介：

Shuo YAN（严硕）: PhD in Finance, Bocconi University

Research Interests: Corporate Finance, Financial Markets and Institutions, Development Economics 

内容提要：

This paper presents an empirical analysis of the finance-growth nexus under financial repression. In this paper, I scrutinize one hypothesis that financial repression leads to a political distortions in bank lending towards state-owned but low-productive firms, and reduces growth. Using disaggregated data at the firm and regional levels in China, one of the countries with significant financial repression, I find this claim to be true. The endogeneity between finance and growth is addressed in this paper by using the Rajan-Zingales approach. Using this approach, I show that industries that are relatively more in need of external finance grow disproportionately slower on highly financial repressed regions and the positive interaction effect between financial development and external finance needs on industry growth rate decreases with financial repression levels. These findings suggest that financial repression interrupts the theoretical mechanism through which financial development fosters economic growth, and declines the positive relationship between finance and growth. The robustness check shows that these results are not driven by region-level omitted variables or outliers.