GEP Research Paper 07/39
Does the Source of Finance Matter for Firm Growth? Evidence from China
Jun Du and Sourafel Girma
Summary
The paper examines the relationship between financial structure and firm growth in China, and shows that the relative importance of the different financing sources depends on firm ownership and growth channel.
Abstract
Using a comprehensive micro dataset spanning the period 1998-2005, this paper provides a systematic investigation of the relationship between financial structure and firm growth in China, controlling for the endogeneity of the former. It finds that financial structure does matter for firm growth in China, although this does not tell the whole story. The relative importance of the different financing sources depends on firm ownership and growth channel.
Issued in November 2007
This paper is available in PDF format