Abstract
ABSTRACT We used firm-level micro panel data for industrial firms in China from 2000 to 2009, which were drawn from a novel database, to study their methods of financing physical and intangible capital investments. Regarding non-listed domestic firms, our findings were as follows: (1) trade credit finances physical capital investments. (2) The complementary relationship between internal and external sources of finance changes from that between cash flows and trade credit to that between cash flows and bank loans as investment risk increases. (3) However, firms forgo debt finance, including bank loans, and rely instead on internal cash flows for financing investments under exceedingly risky conditions, such as the financing of intangible capital investments by financially-constrained high-tech firms.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
