Agric. Econ. - Czech, 2025, 71(11):604-617 | DOI: 10.17221/324/2024-AGRICECON

Nonlinear effects of bank loans on county agrifood SMEs innovation: Empirical evidence from ChinaOriginal Paper

Xi Chen1, Kai Wang2, Lirong Xing3, Jianzhen Lu4
1 School of Humanities and Social Sciences, Jiangsu University of Science and Technology, Zhenjiang, P.R. China
2 College of Economics and Management, Nanjing Agricultural University, Nanjing, P.R. China
3 College of Economics, Shandong University of Technology, Zibo, P.R. China
4 Institute of Agricultural Economics and Development, Jiangsu Academy of Agricultural Sciences, Nanjing, P.R. China

Innovation is the driver of sustainable business development and is essential to promote high quality econo-mic development in the country. Are more bank loans better for small and medium-sized enterprises (SMEs) innovation? Therefore, based on mixed cross-sectional data of county sweet potato processing enterprises, this study applied the econometric model to explore the impact of bank loans on county agrifood SMEs innovation. We find that there is an 'inverted U-shaped' relationship between bank loans and county agrifood SMEs innovation. The analysis of the mechanism shows that bank loans can not only alleviate the problem of innovation financing constraints for agrifood SMEs, but also provide financial support for the innovation activities of agrifood SMEs as a result of trade openness. This study has important practical implications for promoting county agrifood SMEs innovation in China and promoting high-quality county economic development.

Keywords: bank loans; SMEs; enterprise innovation; nonlinear relationship, OLS

Received: September 5, 2024; Revised: September 17, 2025; Accepted: September 22, 2025; Prepublished online: November 25, 2025; Published: November 28, 2025  Show citation

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Chen X, Wang K, Xing L, Lu J. Nonlinear effects of bank loans on county agrifood SMEs innovation: Empirical evidence from China. Agric. Econ. - Czech. 2025;71(11):604-617. doi: 10.17221/324/2024-AGRICECON.
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