Webinar Series



Indirect Effects of Access to Finance

The authors created experimental variation across local markets in China in the share of firms having access to a new loan product, to measure the direct and indirect effects of access to finance. The authors find that: (1) Access to finance had a large positive direct effect on the performance of treated firms. (2) Access to finance had a similar-sized negative indirect effect on the performance of firms with treated competitors. The two effects offset in the aggregate and imply no detectable gains in producer surplus. (3) Access to finance had a positive direct effect on business practices, service quality, and consumer satisfaction, and a negative effect on price. None of these effects were offset by indirect effects, suggesting net gains in consumer surplus. (4) Two additional indirect effects were active: diffusion of borrowing to firms with treated peers, and diffusion of demand to firms with treated neighbors. (5) Combining several effects in a model-based evaluation, the authors estimate that the loan had a private return of 74%, most of which was offset by losses to competitors, and a social return of 60%, most of which was driven by gains to consumers.


Session Chair: Zhiguo HE
Fuji Bank and Heller Professor of Finance and Jeuck Faculty Fellow, Booth School of Business and Senior Fellow, ABFER

10:00 am
Indirect Effects of Access to Finance

Jing CAI, Associate Professor, Department of Agricultural and Resource Economics, University of Maryland

Adam SZEIDL, Professor, Department of Economics and Business, Central European University
10:25 am
Huanhuan ZHENG, Assistant Professor, Lee Kuan Yew School of Public Policy, National University of Singapore
10:50 am
11:10 am

Updated 16 March 2023


  • Jing CAI

    Jing CAI


    Associate Professor, Department of Agricultural and Resource Economics, University of Maryland

    Jing Cai is an Associate Professor at the University of Maryland. She received her PhD from the University of California at Berkeley in 2012. Her research areas are development economics and household finance. Her current research examines the growth of micro-enterprises and SMEs, impacts of tax incentives on firm behavior, and diffusion and impacts of financial innovations in developing countries. Dr. Cai is a Co-Chair of the firm sector of the Abdul Latif Jameel Poverty Action Lab (J-PAL), a Research Associate at the National Bureau of Economic Research (NBER), and an affiliate of the Bureau for Research and Economic Analysis of Development (BREAD). She currently serves as an associate editor of the American Economic Journal: Applied Economics, the Journal of Development Economics, and the Economic Development and Cultural Change.

  • Huanhuan ZHENG

    Huanhuan ZHENG


    Assistant Professor, Lee Kuan Yew School of Public Policy, National University of Singapore

    Huanhuan Zheng joined the Lee Kuan Yew School of Public Policy, National University of Singapore in 2017. Previously she worked in the Chinese University of Hong Kong and the University of York as an Assistant Professor. She received a B.A in Finance and a B.S. in Mathematics from Peking University in 2006, and a Ph.D in Economics from Nanyang Technological University Singapore in 2011.

  • Zhiguo HE

    Zhiguo HE


    Fuji Bank and Heller Professor of Finance and Jeuck Faculty Fellow, Booth School of Business, University of Chicago and Senior Fellow, ABFER

    Zhiguo He is interested in the implications of agency frictions and debt maturities in financial markets and macroeconomics with a special focus on contract theory and banking. His recent research focuses on the role of financial institutions in the 2007/08 global financial crisis. He teaches an elective MBA course, “Chinese Economy and Financial Markets,” and is conducting academic research on Chinese financial markets including the stock market, local government debt, shadow banking, and interbank markets together with recent regulation changes. Professor He has also been writing academic articles on new progress in the area of cryptocurrency and blockchains.

    His research has been published in leading academic journals including the American Economic Review, Econometrica, the Review of Economic Studies, the Journal of Finance, the Review of Financial Studies, the Journal of Financial Economics, and Management Science. He has been an associate editor for the Review of Financial Studies and Management Science and currently serves as an associate editor for the Journal of Finance. He serves as the guest editor of the Review of Finance for the “Special Issue on China” in 2020-2021.

    Professor He received his bachelor and master degrees from the School of Economics and Management at Tsinghua University before receiving his PhD from the Kellogg School of Management at Northwestern University in 2008. He has been named a 2014 Alfred P. Sloan Research Fellow, and has won numerous awards for his outstanding scholastic record, including the Lehman Brothers Fellowship for Research Excellence in Finance in 2007, the Swiss Finance Institute Outstanding Paper Award in 2012, the Smith-Breeden First Prize in 2012, and the Brattle Group First Prize in 2014. Before joining the Chicago Booth faculty in 2008, he worked as a stock analyst at the China International Capital Corporation in Beijing in 2001 and visited the Bendheim Center for Finance at Princeton University as a post-doctoral fellow.

    In Autumn 2015 Professor He was the Dean’s distinguished visiting scholar at Stanford University, Graduate School of Business, and in winter 2020 he is a visiting professor of finance at Yale University, School of Management. In January 2020, he testified at U.S.-China Economic and Security Review Commission (USCC) Hearing on “China’s Quest for Capital: Motivations, Methods, and Implications.”

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Session Format

Each session lasts for 1 hour 10 minutes (25 minutes for the author, 25 minutes for the discussant and 20 minutes for participants' Q&A). Sessions will be recorded and posted on ABFER's web, except in cases where speakers or discussants request us not to.


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