The Belt and Road Initiative is of great significance in promoting a new comprehensive opening up policy and achieving sustained economic development. This initiative can reduce the financial constraints of the supported firms, but there is limited literature analyzing the relationship between the Belt and Road Initiative and the choice of credit term for listed companies.
Using the data of Chinese listed firms during the period from 2012 to 2017, this paper empirically investigates the impact of the Belt and Road Initiative on the credit term choices of supported firms. Empirical results suggest that, in response to the Belt and Road Initiative, firms in affected provinces have decreased their long-term loans, increased their short-term loans, and shorten their credit term structure. This impact is more pronounced in firms with lower credit rating and firms with higher growth. Furthermore, the negative correlation between the Belt and Road and firms' credit term is mainly driven by the motive on reducing financing cost for corporations. Our conclusions still hold even after a series of robustness tests.
The contributions of this paper are as followed. Firstly, this paper extends the analysis of micro-economic consequence about the Belt and Road Initiative. Secondly, this article expands the studies on the influencing factors of enterprises' credit selection from the perspective of macro-economic policy. Finally, this paper deepens the existing literature research focusing on the relationship between the Belt and Road Initiative and the financing behavior of enterprises.
This paper provides quantitative evidence for the economic effect of macro-economic policy from the micro-economic angle, which has some enlightenment for enterprises to understand the actual effect of economic policy and to seek the sustainable development of economic policy.