Ding, S., Guariglia, A., Knight, J. et al. (1 more author) (2021) Negative investment in China: financing constraints and restructuring versus growth. Economic Development and Cultural Change, 69 (4). pp. 1411-1449. ISSN 0013-0079
Abstract
This paper addresses an interesting phenomenon in China’s investment pattern: despite high aggregate investment and remarkable economic growth, negative investment is commonly found at the microeconomic level. Using a large firm-level data set mainly made up of unlisted companies, we show that private firms undertake negative investment in order to raise capital. We also find that, owing to overinvestment and misinvestment in the past, state-owned firms have had to restructure by getting rid of obsolete capital in the face of increasing competition and hardening budget constraints. Finally, rapid economic growth counterweighs both effects for all types of firms, with a larger impact in the private and foreign sectors. Thus, the needs to redeploy resources and to overcome capital market imperfections help to explain the negative investment of many Chinese firms.
Metadata
Item Type: | Article |
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Authors/Creators: |
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Copyright, Publisher and Additional Information: | © 2021 by The University of Chicago. Reproduced in accordance with the publisher's self-archiving policy. |
Dates: |
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Institution: | The University of Sheffield |
Academic Units: | The University of Sheffield > Faculty of Social Sciences (Sheffield) > Management School (Sheffield) |
Depositing User: | Symplectic Sheffield |
Date Deposited: | 06 Aug 2021 15:54 |
Last Modified: | 30 Apr 2022 00:38 |
Status: | Published |
Publisher: | University of Chicago Press |
Refereed: | Yes |
Identification Number: | 10.1086/706825 |
Open Archives Initiative ID (OAI ID): | oai:eprints.whiterose.ac.uk:176871 |