Footnote:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments November 2, 2022 erstellt
Description:
This study examines how the large and unexpected Chinese credit stimulus in 2008 affects firms’ labor decision. Using a large sample of industrial firms, we find that state-owned enterprises tend to hire more employment than their counterparts after the credit stimulus. Mechanism analysis shows that the credit stimulus package is followed by lower financing costs and more bank loans for the state-owned enterprises, enhancing the degree of their excess employment compared with their counterparts. Moderating effect tests suggest that the overemployment effect is stronger in provinces with a high unemployment level and where the political leaders have stronger promotion incentives but weaker in provinces with higher marketization level. Finally, we find that the firm’s overemployment caused by the credit stimulus plans decreases firm labor productivity. Overall, our findings shed light on how credit policy influence firms’ labor decision and offer important implications for regulators