Financial constraints and the productivity–survival link: evidence from China’s firm-level data

Xiaolu Liu and Honglin Li

Industrial and Corporate Change, 2017, vol. 26, issue 5, 763-779

Abstract: We study how financial constraints influence the productivity–survival link, using data of Chinese industrial firms from 1998 through 2009. The analysis shows that financial constraints do not only play a negative role in firm survival, but also weaken the market selection against inefficient firms on average. We also find that the selection mechanism is ineffective for state-owned firms and large firms, and that financial constraints hinder the growth of firm productivity and market share.

JEL-codes: L11 L60 (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (5)

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