Finance and Growth for Microenterprises: Evidence from Rural China

Thorsten Beck, Liping Lu and Rudai Yang

World Development, 2015, vol. 67, issue C, 38-56

Abstract: Using a survey dataset of Chinese rural households, we find that access to external finance is positively associated with the decision to become entrepreneur and the initial investment for microenterprises. Also, we find that use of informal finance, especially financing from friends and family, is positively associated with sales growth of microenterprises with employees, but not of self-employed. We do not find any significant relationship between the use of formal finance and firm growth. Our findings underline the importance of finance for entrepreneurship and microenterprise growth, and the role of informal finance in the absence of efficient formal financial institutions.

Keywords: finance; entrepreneurship; growth; China (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (51)

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Related works:
Working Paper: Finance and Growth for Microenterprises: Evidence from Rural China (2013)
Working Paper: Finance and Growth for Microenterprises: Evidence from Rural China (2013)
Working Paper: Finance and Growth for Microenterprises: Evidence from Rural China (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:wdevel:v:67:y:2015:i:c:p:38-56

DOI: 10.1016/j.worlddev.2014.10.008

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