Firm size, source of finance, and growth: evidence from China

Jun Du, Sourafel Girma

Research output: Contribution to journalArticle

Abstract

Using a comprehensive firm-level data set from China spanning the period 1998–2005, this study investigates the relationship between firm size, financing sources, and total factor productivity growth. Controlling for the endogeneity of financing sources, we find that firm size plays an important role in the way financial structure affects the growth process. Domestic bank loans are more effective for bigger firms, while self-raised finance is more beneficial to smaller firms’ growth. We also uncover evidence that ownership mediates the relationship between firm size, finance, and growth.
Original languageEnglish
Pages (from-to)397-419
Number of pages23
JournalInternational Journal of the Economics of Business
Volume19
Issue number3
Early online date24 Oct 2012
DOIs
Publication statusPublished - Nov 2012

Keywords

  • China
  • growth
  • finance

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