We examine the state-owned enterprises (SOEs) channel in monetary policy transmission in the context of China's 2008 stimulus package. Using a difference-in-difference approach, we show that the higher SOE share in the cities after the stimulus package, the more bank loans issued in the cities. Furthermore, we find that the role of SOEs in monetary policy transmission is more significant in underdeveloped cities and cities with a high level of government intervention. We adopt propensity score matching difference-in-difference to deal with potential endogeneity problem. The baseline results also survive a series of robustness tests.

This paper investigates whether the determinants of mergers and acquisitions (M&A) inflows are different from those of outflows in emerging Asia. We use an augmented gravity model with bilateral cross-border M&A data from 2000 to 2015 for 13 emerging Asian countries. We find that the stock market size of the source country matters for both M&A inflows and outflows. In addition, the motives of firms seeking foreign markets, natural resources, and lower labor costs drive both M&A inflows and outflows. Finally, both the bank credit and the stock market liquidity of the source country play important roles in M&A inflows only, not in M&A outflows.