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Financial constraints in China: Firm-level evidence

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  • Poncet, Sandra
  • Steingress, Walter
  • Vandenbussche, Hylke

Abstract

Using a unique micro-level data set over the period 1998-2005 on Chinese firms, this paper presents empirical findings on the presence of credit constraints. Our findings are threefold. Firstly, private Chinese firms are credit constrained while state-owned firms and foreign-owned firms in China are not; Secondly, the geographical and sectoral presence of foreign capital alleviates credit constraints faced by private Chinese firms. Thirdly, geographical and sectoral presence of state firms aggravates financial constraints for private Chinese firms ("crowding out").

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Bibliographic Info

Article provided by Elsevier in its journal China Economic Review.

Volume (Year): 21 (2010)
Issue (Month): 3 (September)
Pages: 411-422

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Handle: RePEc:eee:chieco:v:21:y:2010:i:3:p:411-422

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Web page: http://www.elsevier.com/locate/chieco

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Keywords: Investment-cash flow sensitivity China Firm-level data Foreign direct investment;

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