A Study of the Impacts of Financial Development on Corporate Financing Constraints

This paper conducts a dynamic panel analysis of the impacts of financial development on corporate fi- nancing constraints using panel data from Chinese listed firms during the period 2003 ~ 2007. The results show that; (1) Financing constraints does exist in listed firms of China; (2) Financial development has reduced firm's financing constraints, and financing constraints in the listed firms controlled by private individuals is more obviously mitigable than that of listed firms controlled by the state; (3) The functions of financial intermedia- tion development in the relief of financing constraints is much larger than that of stock market development.