Research on the relationship between capital investment and bank credit

摘要

This paper study the efficiency of Chinese credit market from the view of firms' investment efficiency. The author find that the higher degree of the over-investment, the more long term loans they got. But for firms that under-invest, the degree of underinvestment has no significant influence on any of long term loans or short term loans. This paper contributes to the literature of credit rationing and provides evidence for the credit decisions of banks and the reform about Chinese banks.