The Financing and Growth of Firms in China and India : Evidence from Capital Markets
This paper studies the extent to which firms in China and India use capital markets to obtain financing and grow. Using a unique data set on domestic and international capital raising activity and firm performance, it finds that the expansion of fi...
| Main Authors: | , |
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2013
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2013/04/17548887/financing-growth-firms-china-india-evidence-capital-markets http://hdl.handle.net/10986/13198 |
| Summary: | This paper studies the extent to which
firms in China and India use capital markets to obtain
financing and grow. Using a unique data set on domestic and
international capital raising activity and firm performance,
it finds that the expansion of financial market activity
since the 1990s has been more limited than what the
aggregate figures suggest. Relatively few firms raise
capital. Even fewer firms capture the bulk of the financing.
Moreover, firms that issue equity or bonds are different and
behave differently from other publicly listed firms. Among
other things, they are typically larger and grow faster. The
differences between users and non-users exist before the
capital raising activity, are associated with the
probability of raising capital, and become more accentuated
afterward. The distribution of issuing firms shifts more
over time than the distribution of those that do not issue,
suggesting little convergence in firm size among listed firms. |
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