Summary
Summary of the article ‘Finance and Firm Volatility: Evidence from Small Business Lending in China’
- Course
- Institution
Summary of the article ‘Finance and Firm Volatility: Evidence from Small Business Lending in China’
[Show more]
Seller
Follow
JonasKlein
Content preview
Supply chain finance initiativesSamenvatting ‘Finance and Firm Volatility: Evidence from Small
Business Lending in China’
The online trading platform Alibaba provides financial technology (FinTech) credit for
millions of micro, small, and medium enterprises (MSMEs). It thus gives them credit access.
We find that credit access significantly reduces firm sales volatility and that the effect is
stronger for firms with fewer alternative sources of financing. We further look at firm exit
probability and find that firms with access to FinTech credit are less likely to go bankrupt or
exit the business in the future. Additional channel tests reveal that firms with FinTech credit
invest more in advertising and product/sector diversification, particularly during business
downturns, which serves as effective mechanisms through which credit access reduces firm
volatility.
The probability that a loan is granted strongly depends on an arbitrary cut-off in a credit
score range: A credit score is a number from 300 to 850 that depicts a consumer’s
creditworthiness. The higher the score, the better a borrower looks to potential lenders.
A credit score is based on credit history: number of open accounts, total levels of debt,
repayment history, and other factors. Lenders use credit scores to evaluate the probability
that an individual will repay loans in a timely manner.
Some key takeaways:
Supply chain finance initiatives should help optimize the performance of the supply
chain as a whole
The schemes can drastically affect behavior of parties in the supply chain, and
consequently how they perform
Initiatives should therefore seek to address key financial and operational
challenges such as liquidity constraints and risk exposure of firms, particularly in the
presence of limited financing alternatives or during harsh macroeconomic
environments
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller JonasKlein. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $3.36. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
63950 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 15 years now
Recently viewed by you
Exam (elaborations) ·
EMT FISDAP FINAL EXAM 200 QUESTIONS AND CORRECT ANSWERS[VERIFIED ANSWERS] 2024/2025|ALREADY GRADED A+
Exam (elaborations) ·
BIO 210 Final Exam latest update 2024-2025 with correct verified answers //download and pass
Exam (elaborations) ·
Introduction to Philosophy Final Exam (StraighterLine): Questions & Answers: Guaranteed APlus Guide
Exam (elaborations) ·
2024 Ethics and Compliance Assessment UHC written exam with already passed questions and answers
Exam (elaborations) ·
NR 565 MIDTERM 2024/25 EXAM REVIEW QUESTIONS AND ANSWERS, G| LATEST UPDATES 2024/25 APPROVED| RADED A+
Exam (elaborations) ·
2023 TEST BANK FOCUS ON NURSING PHARMACOLOGY 9TH EDITION BY AMY KARCH | COMPLETE GUIDE 2023.
Exam (elaborations) ·
Test Bank For Contemporary Human Geography - Second Edition ©2019 All Chapters - 9781319135041
Exam (elaborations) ·
Health Assessment Exam1: Q&AsALLANSWERS 100%CORRECTStudyGuideLATEST UPDATE 2022/2023RATEDA+
