Outward Direct Investment, Firm Productivity and Credit Constraints: Evidence from Chinese Firms

12 Pages Posted: 29 Feb 2016

See all articles by Bijun Wang

Bijun Wang

Chinese Academy of Social Sciences (CASS)

Yuyan Tan

Peking University

Miaojie Yu

Peking University - China Center for Economic Research (CCER)

Yiping Huang

Peking University, National School of Development

Date Written: February 2016

Abstract

China is currently the third largest country in terms of outward direct investment (ODI), with the investors mainly being state‐owned enterprises. This presents a question: What inhibits private enterprises from increasing ODI? Using a firm‐level panel data set for Zhejiang Province in China, we examine the impact of firm heterogeneity on private firm ODI. We have three main findings: first, a higher productivity level contributes to better access to ODI, and increases ODI value as well; second, lowering a firm's financial constraint level can increase both the probability and volume of ODI; third, productivity cannot offset the negative effect of financial constraint on private firm ODI.

Suggested Citation

Wang, Bijun and Tan, Yuyan and Yu, Miaojie and Huang, Yiping, Outward Direct Investment, Firm Productivity and Credit Constraints: Evidence from Chinese Firms (February 2016). Special Section: China's Growing Trade and its Role to the World Economy, Vol. 21, Issue 1, pp. 72-83, 2016. Available at SSRN: https://ssrn.com/abstract=2738930 or http://dx.doi.org/10.1111/1468-0106.12152

Bijun Wang

Chinese Academy of Social Sciences (CASS)

Beijing, 100732
China

Yuyan Tan

Peking University

No. 38 Xueyuan Road
Haidian District
Beijing, Beijing 100871
China

Miaojie Yu

Peking University - China Center for Economic Research (CCER) ( email )

Beijing, Beijing 100871
China
+86-10-6275-3109 (Phone)

HOME PAGE: http://mjyu.ccer.edu.cn

Yiping Huang (Contact Author)

Peking University, National School of Development ( email )

No. 38 Xueyuan Road
Haidian District
Beijing, Beijing 100871
China

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