Financing constraints on the size distribution of industrial firms: the Chinese experience |
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| Authors: | Qigang Yuan Hui Shang Wei Zhang Zaghum Umar |
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| Affiliation: | 1. School of International Business, Shandong University of Finance and Economics, Jinan, P. R. China;2. School of International Trade and Economics, University of International Business and Economics, Beijing, P. R. China;3. School of Business, Shandong Yingcai University, Jinan, P. R. China;4. Suleman Dawood School of Business, Lahore University of Management, Sciences Sector U, DHA, Lahore Cantt, Pakistan |
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| Abstract: | We investigate whether financing constraints affect the size distribution of Chinese industrial firms from 1998 to 2007. Although the firm size distribution does not follow Zipf distribution in China, it is approaching Zipf distribution over time. In general, financing constraints have a robustly negative effect on the size distribution of firms. Furthermore, firms in Western China grow significantly more equally after controlling for financing constraints. However, the effect of financing constraints in Central China is significantly negative, and the effect of financing constraints on firm size distribution in Eastern China is insignificant. We thus expect a non-linear relationship between financing constraints and firm size distribution. |
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| Keywords: | Financing constraints zipf distribution Chinese industrial firms regional disparity |
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