Internal Finance and Growth: Microeconometric Evidence on Chinese Firms

Alessandra Guariglia, Xiaoxuan Liu and Lina Song
Additional contact information
Xiaoxuan Liu: Chinese Academy of Social Sciences

No 3808, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Does the availability of internal finance constrain firm growth? Or does it foster it? To answer these questions, we use a panel of 407,096 Chinese firms over the period 2000?2005. We estimate dynamic assets growth equations augmented with cash flow, and find that the growth of state owned enterprises is not affected by cash flow, while that of privately owned firms is most affected. Considering that they represent 62% of the observations in our sample and that, in spite of being typically discriminated against by financial institutions, private firms have experienced sensational growth rates, our results suggest that internal finance has fostered rather than constrained their growth.

Keywords: cash flow; financial constraints; assets growth (search for similar items in EconPapers)
JEL-codes: D92 (search for similar items in EconPapers)
Pages: 38 pages
Date: 2008-10
New Economics Papers: this item is included in nep-bec, nep-cna, nep-dev, nep-fdg and nep-tra
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (18)

Published - published in: Journal of Development Economics, 2011, 96 (1), 79 - 94

Downloads: (external link)
https://docs.iza.org/dp3808.pdf (application/pdf)

Related works:
Journal Article: Internal finance and growth: Microeconometric evidence on Chinese firms (2011)
Working Paper: Internal Finance and Growth: Microeconometric Evidence on Chinese Firms (2009)
Working Paper: Internal Finance and Growth: Microeconometric Evidence on Chinese Firms (2008)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:iza:izadps:dp3808

Ordering information: This working paper can be ordered from
IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany

Access Statistics for this paper

More papers in IZA Discussion Papers from Institute of Labor Economics (IZA) IZA, P.O. Box 7240, D-53072 Bonn, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Holger Hinte ().