Cull, RobertXu, Lixin ColinYang, XiZhou, Li-AnZhu, Tian2014-02-052014-02-052013-11https://hdl.handle.net/10986/16927This paper uses data from a large survey of Chinese firms to investigate whether local government efforts to facilitate market development improve firm efficiency. Both government provision of information about products, markets, and innovation and government assistance in arranging loans are positively associated with firm efficiency. Those private firms with weak access to and knowledge of financial, input, and product markets benefit most from such assistance. These patterns are robust across multiple estimation approaches. Case studies of specific types of market facilitation by local governments are provided. The evidence is consistent with the notion that government facilitation can help some firms overcome market failures in the early stages of development. The paper argues that changing fiscal dynamics that forced local governments to become increasingly self-reliant in generating revenue and a government promotion system based on local economic performance compelled these efforts at market facilitation.en-USCC BY 3.0 IGOACCESS TO BANKACCESS TO BANK LOANSACCESS TO FINANCEACCESS TO FORMAL FINANCEACCOUNTANTACCOUNTINGASSOCIATIONSBANKBANK LOANBANK LOANSBANK POLICIESBANK POLICYBANKING SYSTEMBANKSBIASBONDSBORROWERSBORROWINGBRIBEBRIBESBUSINESS SUCCESSCAPITALCAPITAL INVESTMENTCHECKCHECKSCOLLATERAL FOR BANK LOANSCOLLATERAL REGISTRIESCOMMERCIAL CREDITCOMPARATIVE ECONOMICSCONTRACTCONTRACT ENFORCEMENTCONTRACTINGCOOPERATIVECOOPERATIVE BANKINGCOORDINATION FAILURECORPORATE GOVERNANCECORRUPTIONCOSTSCREDITCREDIT CONSTRAINTSCREDIT COOPERATIVESCREDIT MARKETCREDIT MARKETSCREDIT REPORTINGCREDIT REPORTING AGENCIESCREDIT REPORTING SYSTEMSDEBTDECENTRALIZATIONDEFAULTDEVELOPING COUNTRIESDEVELOPING COUNTRYDEVELOPMENT POLICYDISCRIMINATIONDIVIDENDSDOMESTIC MARKETDUMMY VARIABLEDUMMY VARIABLESECONOMIC DEVELOPMENTECONOMIC GROWTHECONOMIC HISTORYECONOMIC PERFORMANCEECONOMIC REFORMECONOMIC RESEARCHECONOMIC SUCCESSECONOMIC THEORYECONOMICSEFFECTSEFFICIENCYEMPLOYEEEMPLOYEESEMPLOYMENTENDOWMENTSENTERPRISESENTREPRENEURSHIPENTRY BARRIERSEQUIPMENTEQUITYEQUITY INVESTMENTEQUITY INVESTMENTSEXCHANGEEXPENDITUREEXPENDITURESEXPORTSEXPROPRIATIONEXTERNAL FINANCEEXTERNAL FINANCINGFACE VALUEFACILITATIONFARMERSFEESFINANCEFINANCIAL CAPACITYFINANCIAL CRISISFINANCIAL DEVELOPMENTFINANCIAL INTERMEDIATIONFINANCIAL MARKETFINANCIAL SECTORFINANCIAL SECTOR DEVELOPMENTFINANCIAL SUPPORTFINANCING REQUIREMENTFIRM PERFORMANCEFISCAL POLICYFISCAL REFORMFOREIGN DIRECT INVESTMENTFOREIGN FIRMSFRAUDGDPGDP PER CAPITAGLOBALIZATIONGOODGOODSGOVERNMENT DEBTGOVERNMENT FUNDINGGOVERNMENT GRANTSGOVERNMENT INTERVENTIONGOVERNMENT INTERVENTIONSGOVERNMENT OWNERSHIPGOVERNMENT POLICIESGUARANTEESGUARANTORHOUSEHOLDSHUMAN CAPITALINCENTIVESINCOMEINCOME LEVELINCOME LEVELSINCOME TAXINDUSTRIALIZATIONINDUSTRYINFLUENCEINFORMAL FINANCEINFORMAL FINANCINGINFORMATION ASYMMETRIESINFORMATION ASYMMETRYINFORMATION INFRASTRUCTUREINFORMATION SERVICEINFORMATION TECHNOLOGYINNOVATIONINPUTSINSECURE PROPERTYINSTITUTIONAL REFORMSINSTRUMENTSINTERESTINTEREST PAYMENTSINTERESTSINTERNATIONAL BANKINTERNATIONAL TRADEINVESTINGINVESTMENTINVESTMENT CLIMATEINVESTMENTSJUDICIAL SYSTEMLABORLABOR PRODUCTIVITYLACK OF COLLATERALLACK OF INFORMATIONLANDLAND USELAWLEGAL SYSTEMLENDERSLENDINGLOAN DECISIONSLOANSLOCAL BUSINESSLOCAL BUSINESSESLOCAL ECONOMIESLOCAL ECONOMYLOCAL GOVERNMENTLOCAL GOVERNMENTSMACROECONOMICSMANAGEMENTMARKET DEVELOPMENTMARKET ECONOMYMARKET ENVIRONMENTMARKET FAILUREMARKET FAILURESMARKET TRADEMATURE MARKETSMIXED ECONOMYMOTIVATIONNEW ENTRANTSORGANIZATIONSOVERDRAFTOVERDRAFT FACILITIESPATENTSPAYMENTPEOPLEPLANNED ECONOMYPLEDGEPOLITICAL ECONOMYPOLITICAL STABILITYPOOR ACCESSPRICESPRIVATE ENTERPRISEPRIVATE ENTERPRISESPRIVATE INVESTORSPRIVATE PARTIESPRIVATE PROPERTYPRIVATIZATIONPRODUCT MARKETSPRODUCTIONPRODUCTIVITYPROJECTSPROPERTYPROPERTY RIGHTSPROPERTY RIGHTS PROTECTIONPUBLIC POLICYRENTRENTSREPAYMENTREVENUEREVENUESRISKRURAL CREDITSALES TAXESSAVINGSSAVINGS BANKSSECRETARIESSERVICESSHARESHAREHOLDERSSHORT-TERM FINANCINGSMALL BUSINESSSOCIAL SERVICESSTRATEGIESSTRUCTURAL CHANGESUBSIDIESSUPPLIERSSUPPLYTANGIBLE ASSETSTAX BURDENSTAX RATETAX RATESTAX REDUCTIONSTAXESTELECOMMUNICATIONSTHEORYTOTAL FACTOR PRODUCTIVITYTRADE CREDITTRADE CREDITSTRADINGTRAININGTRANSFERSTRANSITION COUNTRIESTRANSITION ECONOMIESTURNOVERURBAN AREAUTILITYVALUE ADDEDVENTURE CAPITALVILLAGEWAGESWORKING CAPITALgovernment facilitationWorld Bank10.1596/1813-9450-6688