Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/35627
Authors: 
Guariglia, Alessandra
Liu, Xiaoxuan
Song, Lina
Year of Publication: 
2008
Series/Report no.: 
IZA discussion papers 3808
Abstract: 
Does the availability of internal finance constrain firm growth? Or does it foster it? To answer these questions, we use a panel of 407,096 Chinese firms over the period 2000-2005. We estimate dynamic assets growth equations augmented with cash flow, and find that the growth of state owned enterprises is not affected by cash flow, while that of privately owned firms is most affected. Considering that they represent 62% of the observations in our sample and that, in spite of being typically discriminated against by financial institutions, private firms have experienced sensational growth rates, our results suggest that internal finance has fostered rather than constrained their growth.
Subjects: 
Assets growth
cash flow
financial constraints
JEL: 
D92
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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