Economics at your fingertips  

Determinants of the capital structure of Chinese non-listed enterprises: Is TFP efficient?

Dongyang Zhang and Deqiang Liu

Economic Systems, 2017, vol. 41, issue 2, 179-202

Abstract: This paper investigates the relationship between TFP (Total Factor Productivity) and leverage measures (total, short-term and long-term leverage) of Chinese non-listed firms during the period 1999–2007. First, TFP is significantly and positively associated with the three leverage measures of private and foreign owned enterprises, but insignificantly correlated with state-owned enterprises. Second, financial constraints, leverage costs, and the institutional environment can affect the relation between TFP and leverage; this relation tends to be much stronger when enterprises face stronger financial constraints, higher leverage costs, and an underdeveloped institutional environment. Third, we show that TFP also plays a significant and positive role on formal and informal leverage. Our research offers new evidence that TFP is an important determinant of capital structure choices.

Keywords: Capital structure; Tfp; Financial constraints; Institutional structure; Cost of debt; Chinese non-listed firms (search for similar items in EconPapers)
JEL-codes: G18 G32 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations View citations in EconPapers (1) Track citations by RSS feed

Downloads: (external link)
Full text for ScienceDirect subscribers only

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:

Access Statistics for this article

Economic Systems is currently edited by R. Frensch

More articles in Economic Systems from Elsevier Contact information at EDIRC.
Bibliographic data for series maintained by Dana Niculescu ().

Page updated 2018-04-21
Handle: RePEc:eee:ecosys:v:41:y:2017:i:2:p:179-202