Credit constraints and firm productivity: Microeconomic evidence from China

Li, Yao Amber and Liaob, Wei and Zhao, Chen Carol,(2018), Credit constraints and firm productivity: Microeconomic evidence from China. , Research in International Business and Finance, UNSPECIFIED

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We use a panel of over 600,000 Chinese firms (1998–2009) to investigate the effects of credit constraints on firm productivity. We find that both internal finance through a firms own cash flow and external credit supply significantly promote firm productivity and productivity growth rates. Specially, there is a substitution effect between internal finance and external credit supply: the marginal effect of internal finance on firm productivity is weaker when firms have sufficient external credit. Also, internal finance is more important for firms in those financially vulnerable industries. Finally, we observe that marginal effect of both external credit supply and internal finance on firm's productivity is weaker for SOEs than non-SOEs.
Keywords : TFP TFP growth rate Credit constraint Internal financing External finance dependence Financial market development, UNSPECIFIED
Journal or Publication Title: Research in International Business and Finance
Volume: 45
Item Type: Article
Subjects: Ekonomi Pembangunan
Depositing User: Elok Inajati
Date Deposited: 13 Dec 2019 09:36
Last Modified: 13 Dec 2019 09:36

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