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Internal Finance and Growth: Microeconometric Evidence on Chinese Firms

Alessandra Guariglia (), Xiaoxuan Liu and Lina Song

Discussion Papers from University of Nottingham, Centre for Finance, Credit and Macroeconomics (CFCM)

Abstract: Using a panel of 79,841 Chinese firms over the period 2000-2007, we examine the extent to which liquidity constraints affect firms. assets growth. We find that state owned enterprises are not affected, while the availability of internal finance represents a binding constraint for the growth of private firms, especially those operating in coastal regions, with negligible foreign ownership. Thanks to their high productivity, cash flow is, however, so abundant for these firms that they are able to grow at a very fast rate, despite being discriminated against by financial institutions. Hence, well developed external capital markets may not always be needed for fast economic growth.

Keywords: Assets growth; Cash flow; Financial constraints. (search for similar items in EconPapers)
Date: 2009-11
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Related works:
Journal Article: Internal finance and growth: Microeconometric evidence on Chinese firms (2011) Downloads
Working Paper: Internal Finance and Growth: Microeconometric Evidence on Chinese Firms (2008) Downloads
Working Paper: Internal Finance and Growth: Microeconometric Evidence on Chinese Firms (2008) Downloads
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