Chinese firms’ resilience after financial crisis in the context of local economic growth targets

This paper explores how firms’ resilience in China during financial crises is shaped by economic growth targets. The findings indicate that ambitious growth targets set by local governments significantly boost firms’ resilience. This can be attributed to the unique blend of political centralisation and economic decentralisation, where local officials, motivated by promotions and increased fiscal revenue, mobilise various resources and measures to achieve growth targets. The influence is stronger for larger, foreign-owned firms and sectors that contribute quickly to renewed economic growth. The distorted resource allocation may generate risks for longer term regional development due to a neglect of technology and education.