Abstract

http://ssrn.com/abstract=1863865
 
 

References (58)



 
 

Citations (2)



 


 



Investment and Financing Constraints in China: Does Working Capital Management Make a Difference?


Sai Ding


University of Glasgow

Alessandra Guariglia


Durham University - Durham Business School

John B. Knight


University of Oxford - Department of Economics

June 13, 2011


Abstract:     
We use a panel of over 116,000 Chinese firms of different ownership types over the period 2000-2007 to analyze the linkages between investment in fixed and working capital and financing constraints. We find that those firms characterized by high working capital display high sensitivities of investment in working capital to cash flow (WKS) and low sensitivities of investment in fixed capital to cash flow (FKS). We then construct and analyze firm-level FKS and WKS measures and find that, despite severe external financing constraints, those firms with low FKS and high WKS exhibit the highest fixed investment rates. This suggests that good working capital management may help firms to alleviate the effects of financing constraints on fixed investment.

Number of Pages in PDF File: 47

Keywords: investment, cash flow, financing constraints, working capital

JEL Classification: D92, E22

working papers series





Download This Paper

Date posted: June 13, 2011  

Suggested Citation

Ding, Sai and Guariglia, Alessandra and Knight, John B., Investment and Financing Constraints in China: Does Working Capital Management Make a Difference? (June 13, 2011). Available at SSRN: http://ssrn.com/abstract=1863865 or http://dx.doi.org/10.2139/ssrn.1863865

Contact Information

Sai Ding (Contact Author)
University of Glasgow ( email )
Glasgow, Scotland G12 8LE
United Kingdom
Alessandra Guariglia
Durham University - Durham Business School ( email )
Durham Business School
Mill Hill Lane
Durham, DH1 3LB
United Kingdom
John B. Knight
University of Oxford - Department of Economics ( email )
Oxford
United Kingdom
Feedback to SSRN


Paper statistics
Abstract Views: 959
Downloads: 315
Download Rank: 54,819
References:  58
Citations:  2

© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollo1 in 0.406 seconds