Infrastructure investment boosts credit access for LGFVs in China's economy.
The researchers looked at how China's 2009 monetary stimulus affected credit allocation, especially in infrastructure. They used loan data from all sectors and found that the stimulus didn't give state-owned enterprises (SOEs) an advantage in getting credit, except in manufacturing. Infrastructure investments not related to the stimulus helped banks give more credit to local government financing vehicles (LGFVs) in infrastructure projects, but made it harder for non-SOEs in other sectors to get credit.