Financing Constraints and Firm’s Productivity Under the COVID-19 Epidemic Shock: Evidence of A-Shared Chinese Companies

Zoey Wong, Afei Chen, Farhad Taghizadeh-Hesary, Rongrong Li and Qunxi Kong ()
Additional contact information
Zoey Wong: Nanjing University
Afei Chen: Nanjing University of Finance and Economics
Farhad Taghizadeh-Hesary: Tokai University
Rongrong Li: Nanjing University of Finance and Economics
Qunxi Kong: Nanjing University of Finance and Economics

The European Journal of Development Research, 2023, vol. 35, issue 1, No 8, 167-195

Abstract: Abstract Focusing on the financing barriers to firm productivity improvement under the influence of external shocks, we empirically analyze the data of A-share listed companies from 2007-2018 to determine the impact of financing constraints on total factor productivity (TFP) in the context of COVID-19 pandemic and the paths of factor use efficiency and R&D innovation efficiency on this impact using ordinary least-squares (OLS) method. We find that financing constraints are an important factor inhibiting the TFP of firms. This inhibitory effect is more serious in small-scale firms, non-state firms, and non-energy firms. Further investigation shows that the inhibitory effect of financing constraints on firms’ TFP is more pronounced when firms are located in the Yangtze River Delta city cluster, the Pearl River Delta city cluster, non-port cities, and provincial capitals. The mechanism test finds that improving the efficiency of capital use and labor use can alleviate the suppressive effect of financing constraints on TFP. The alleviating impact is more significant when capital use efficiency is improved. However, increasing the efficiency of R&D innovation further strengthens the inhibitory effect of financing constraints, and this effect is more pronounced under positive external shocks.

Keywords: Financing constraints; TFP; COVID-19; R&D innovation efficiency; Factor use efficiency (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://link.springer.com/10.1057/s41287-021-00501-1 Abstract (text/html)
Access to full text is restricted to subscribers.

Related works:
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:pal:eurjdr:v:35:y:2023:i:1:d:10.1057_s41287-021-00501-1

Ordering information: This journal article can be ordered from
http://www.springer.com/journal/41287/PS2

DOI: 10.1057/s41287-021-00501-1

Access Statistics for this article

The European Journal of Development Research is currently edited by Spencer Henson and Natalia Lorenzoni

More articles in The European Journal of Development Research from Palgrave Macmillan, European Association of Development Research and Training Institutes (EADI) Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().