Regional Disparities and Investment–Cash Flow Sensitivity: Evidence from Chinese Listed Firms

11 Pages Posted: 21 Dec 2009

See all articles by Jianjun Sun

Jianjun Sun

Hainan University

Nobuyoshi Yamori

Kobe University - Research Institute for Economics & Business Administration

Abstract

In China, regional disparities are significant. We find that firms in inland regions rely more on their internal funds in terms of their investment activities than those in coastal regions, and that the sensitivity gap between inland and coastal firms widened in the recent contractionary monetary policy period. This suggests that firms in inland regions find it harder to obtain outside funds due to the unfavourable social and economic environments they face. Our findings suggest that capital markets in China respond rationally to the potential impact of regional disparities on a firm's performance.

Suggested Citation

Sun, Jianjun and Yamori, Nobuyoshi, Regional Disparities and Investment–Cash Flow Sensitivity: Evidence from Chinese Listed Firms. Pacific Economic Review, Vol. 14, Issue 5, pp. 657-667, December 2009, Available at SSRN: https://ssrn.com/abstract=1525083 or http://dx.doi.org/10.1111/j.1468-0106.2009.00477.x

Jianjun Sun

Hainan University ( email )

No. 58, Renmin Avenue
570228, P.R.
Haikou, HainanProvince
China

Nobuyoshi Yamori

Kobe University - Research Institute for Economics & Business Administration ( email )

2-1, Rokkodai cho
Nada-ku
Kobe, 657-8501
Japan

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
1
Abstract Views
313
PlumX Metrics