Debt structure, economic stimulus and firm investment efficiency

Miao Han, Wei Huang, Yun Shen

Research output: Journal PublicationArticlepeer-review

1 Citation (Scopus)


We demonstrate that, in China, firm investment efficiency gains are associated with the use of short-term debt, especially its trade credit component. During the 2009–2010 economic stimulus plan, such effects were heightened and generally remained persistent in the 2011–2013 poststimulus period. Our findings support the view that the rollover pressure of short-maturity debt and the information advantage of supply chain financing are both effective mechanisms for enhancing firm governance in an environment more susceptible to financial market incompleteness. Consequently, the enormous credit boost during the stimulus plan was more efficiently invested when channelled through firms' supply chains.

Original languageEnglish
Pages (from-to)284-313
Number of pages30
JournalEuropean Financial Management
Issue number1
Publication statusPublished - Jan 2024


  • China
  • debt structure
  • economic stimulus
  • investment efficiency
  • trade credit

ASJC Scopus subject areas

  • Accounting
  • General Economics,Econometrics and Finance


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