Large Chinese firms increase debt when banks lend more, impacting economy.
The study looked at how Chinese companies' borrowing from banks affects their financial decisions. It found that big state-owned companies tend to borrow more when banks lend more, while small private firms borrow less. This is because small firms struggle to get bank loans. During a period of high lending in 2009 and 2010, big companies borrowed more than small ones. This shows that bank loans play a big role in how companies manage their money in China.