Rollover restrictions and firm export behavior: evidence from China

This paper employs difference-in-differences identification strategy to investigate the impact of nationwide rollover restrictions on firm export behavior with the micro-data of China’s listed firms, using the exogenous event of China passing the Guideline for Loan Risk Classification in 2007 as a quasi-natural experiment. Our findings reveal that rollover restrictions have a significantly negative effect on firm export behavior, including extensive and intensive margins of firm export. Moreover, the potential mechanism analysis reveals that rollover restrictions adversely affect firm export behavior by increasing firm financing constraints, reducing the supply of firm commercial credit, and inhibiting firm technology innovation. Additionally, heterogeneity tests demonstrate that the impact of rollover restrictions on firm export behavior varies across different industries and types of firms. This paper sheds light on the economic impacts of rollover restrictions on firms and provides policy implications for avoiding a “one-size-fits-all” policy pattern and comprehensively enhancing the corporate governance capacity.