Inside the Virtuous Cycle between Productivity, Profitability, Investment and Corporate Growth: An Anatomy of China Industrialization

Yu, Xiaodan ; Dosi, Giovanni ; Grazzi, Marco ; Lei, Jiasu (2015) Inside the Virtuous Cycle between Productivity, Profitability, Investment and Corporate Growth: An Anatomy of China Industrialization. Bologna: Dipartimento di Scienze economiche DSE, p. 45. DOI 10.6092/unibo/amsacta/4245. In: Quaderni - Working Paper DSE (1006). ISSN 2282-6483.
Full text available as:
[img]
Preview
PDF
License: Creative Commons Attribution Non-commercial

Download (809kB) | Preview

Abstract

This article explores the dynamics of market selection by investigating of the relationships linking productivity, profitability, investment and growth, based on China's manufacturing firm-level dataset over the period 1998-2007. First, we find that productivity variations, rather than relative levels, are the dominant productivity-related determinant of firm growth, and account for 15%-20% of the variance in firms' growth rates. The direct relation between profitability and firm growth is much weaker as it contributes for less than 5% to explain the different patterns of firm growth. On the other hand, the profitability-growth relationship is mediated via investment. Firm's contemporaneous and lagged profitabilities display positive and significant effect on the probability to report an investment spike, and, in turn, investment activity is related to higher firm growth.

Abstract
Document type
Monograph (Working Paper)
Creators
CreatorsAffiliationORCID
Yu, Xiaodan
Dosi, Giovanni
Grazzi, Marco
Lei, Jiasu
Keywords
Productivity, Market selection, Profitability, Investment spike, Firm growth, Chinese economy
Subjects
ISSN
2282-6483
DOI
Deposit date
11 May 2015 14:43
Last modified
21 Oct 2015 09:57
URI

Other metadata

Downloads

Downloads

Staff only: View the document

^