Internal Finance and Growth: Microeconometric Evidence on Chinese Firms
Alessandra Guariglia (),
Xiaoxuan Liu and
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Xiaoxuan Liu: Chinese Academy of Social Sciences
No 3808, IZA Discussion Papers from Institute of Labor Economics (IZA)
Does the availability of internal finance constrain firm growth? Or does it foster it? To answer these questions, we use a panel of 407,096 Chinese firms over the period 2000?2005. We estimate dynamic assets growth equations augmented with cash flow, and find that the growth of state owned enterprises is not affected by cash flow, while that of privately owned firms is most affected. Considering that they represent 62% of the observations in our sample and that, in spite of being typically discriminated against by financial institutions, private firms have experienced sensational growth rates, our results suggest that internal finance has fostered rather than constrained their growth.
Keywords: cash flow; financial constraints; assets growth (search for similar items in EconPapers)
JEL-codes: D92 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-bec, nep-cna, nep-dev, nep-fdg and nep-tra
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Published in: Journal of Development Economics, 2011, 96 (1), 79 - 94
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Journal Article: Internal finance and growth: Microeconometric evidence on Chinese firms (2011)
Working Paper: Internal Finance and Growth: Microeconometric Evidence on Chinese Firms (2009)
Working Paper: Internal Finance and Growth: Microeconometric Evidence on Chinese Firms (2008)
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