TY - JOUR
T1 - Internal finance and growth
T2 - Microeconometric evidence on Chinese firms
AU - Guariglia, A.
AU - Liu, X.
AU - Song, L.
N1 - Copyright 2011 Elsevier B.V., All rights reserved.
PY - 2011/9/1
Y1 - 2011/9/1
N2 - 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.
AB - 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.
UR - http://www.scopus.com/inward/record.url?partnerID=yv4JPVwI&eid=2-s2.0-79955987907&md5=192ad5dd826c0a07d2c923afb61c5738
U2 - 10.1016/j.jdeveco.2010.07.003
DO - 10.1016/j.jdeveco.2010.07.003
M3 - Article
AN - SCOPUS:79955987907
SN - 0304-3878
VL - 96
SP - 79
EP - 94
JO - Journal of Development Economics
JF - Journal of Development Economics
IS - 1
ER -