This paper analyzes the effect of undervaluation on economic growth in the presence of borrowing constraints. Based on a two-sector, small open-economy model, we show that undervaluation can promote economic growth by partly correcting distortions in financial markets through the channels of...

This paper studies the relationship between firms’ excess capacity and their environmental behavior by matching the environmental data of China’s major iron and steel firms with the Chinese Industrial Enterprises database. The findings are as follows. (1) A firm’s excess capacity leads to...

Can bank competition help attenuate the prevalence of zombie firms? Motivated by a stylized model, this paper studies the effect of bank competition on the formation of zombie firms in two stages: the formation of distressed firms and distressed firms obtaining zombie lending. Using China’s...

Can bank competition help attenuate the prevalence of zombie firms? Motivated by a stylized model, this paper studies the effect of bank competition on the formation of zombie firms in two stages: the formation of distressed firms and distressed firms obtaining zombie lending. Using China’s...

This paper studies the relationship between firms’ excess capacity and their environmental behavior by matching the environmental data of China’s major iron and steel firms with the Chinese Industrial Enterprises database. The findings are as follows. (1) A firm’s excess capacity leads to...