Source of finance, growth and firm size: evidence from China

Jun Du, Sourafel Girma

Research output: Preprint or Working paperWorking paper


Using a comprehensive firm-level dataset spanning the period 1998-2005, this paper provides a thorough investigation of the relationship between firm size, total factor productivity growth and financial structure in China, controlling for the endogeneity of the latter. Generally, it finds financing source matters for firms of different size, and the extent to which financing source matters for firm growth is greater for small firms than big firms. Self-raised finance appears to be most effective in promoting small firms to grow, and bank loan seems to be more supportive to big firms. The relationship between size, finance and growth also depends on ownership. In addition, there exist strong complementarities between formal and informal finance, as well as between indigenous and foreign finance.
Original languageEnglish
ISBN (Print)978-9-29230172-9
Publication statusPublished - Jan 2009

Publication series

NameWIDER research paper
ISSN (Electronic)1810-2611


  • China
  • finance
  • firm size
  • growth


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