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Keywords:

  • Access to bank loans;
  • private enterprises;
  • property rights protection;
  • political participation;
  • philanthropic activities.
  • D23;
  • O16 and P23

Abstract

Poor protection of private property has limited the access to bank loans by private enterprises in developing and transition economies. Under those circumstances, private entrepreneurs have resorted to various ways of enhancing the de facto protection of private property. Using a dataset of 3,073 private enterprises in China, this paper empirically investigates the impact of political participation and philanthropic activities – informal substitutes for the lack of formal protection of private property – on the access to bank loans.