Financing constraints and ODI margins: Evidence from China

Fang Zhang and Lianxing Yang

Economic Systems, 2020, vol. 44, issue 1

Abstract: Using a novel firm-level dataset on China, this paper examines the effects of financing constraints on enterprises’ outward direct investment (ODI) from the perspective of binary margins of ODI. The main findings of the paper are threefold. First, financing constraints show a negative effect on enterprises’ ODI for both the intensive and extensive margins, with a more significant effect on the extensive margin. Second, the negative effect is mostly significant in the energy industry, while it is not significant in non-energy industries. Finally, financing constraints show a negative effect on state-owned enterprises for both margins, while the effect is less significant for non-state-owned enterprises. The findings in the paper have policy implications for understanding and promoting ODI in emerging economies.

Keywords: Financing constraints; Outward direct investment (ODI); Intensive margin; Extensive margin; Energy industry; State-owned enterprises (SOEs) (search for similar items in EconPapers)
JEL-codes: F21 F23 G30 O13 P28 Q43 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0939362518303923
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: https://EconPapers.repec.org/RePEc:eee:ecosys:v:44:y:2020:i:1:s0939362518303923

DOI: 10.1016/j.ecosys.2019.100741

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 Catherine Liu ().