Economics, Econometrics and Finance
5 years ago

Chinese firms boost exports with working capital investment, study finds

Essays in corporate finance: empirical applications in China
Zerun Liu

Paper Summary

The article explores how Chinese firms grow rapidly despite financial constraints. They found that investing in working capital helps firms export, especially for private firms. Higher cash flows and better financial conditions can ease financial constraints for firms. Private firms are more efficient in investments compared to state-owned enterprises. Cash flow helps firms smooth out research and development projects during economic shocks.

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