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Contribution Details
| Type | Journal Article |
| Scope | Discipline-based scholarship |
| Title | Formal, informal or co-funding? Evidence on the co-funding of Chinese firms |
| Organization Unit | |
| Authors |
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| Item Subtype | Original Work |
| Refereed | Yes |
| Status | Published in final form |
| Language |
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| Journal Title | Journal of Financial Intermediation |
| Publisher | Elsevier |
| Geographical Reach | international |
| ISSN | 1042-9573 |
| Volume | 27 |
| Page Range | 31 - 60 |
| Date | 2016 |
| Abstract Text | Different modes of external finance provide heterogeneous benefits for the borrowing firms. Informal finance offers informational advantages whereas formal finance is scalable. Using unique survey data from China, we find that informal finance is associated with higher sales growth for small firms but lower sales growth for large firms. We identify a complementary effect between informal and formal finance for the sales growth of small firms, but not for large firms. Co-funding, thereby simultaneously using the informational advantage of informal finance and the scalability of formal finance, is therefore the optimal choice for small firms. |
| Digital Object Identifier | 10.1016/j.jfi.2016.05.003 |
| Other Identification Number | merlin-id:13375 |
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