Empirical Researches For Chinese Lised Companies On The Relationship Between Firm Size And Credit Financing

Credit financing is one of important channel for companies to raise funds, specially having particular meaning for state-owned enterprises in the transition economy. There are approximately two directions on the study of corporation credit financing. One is the relationship between corporation credit financing and corporation value, the other is the determinants of corporation credit financing. As far as Chinese listed companies are concerned, weather firm size is one of the factors which affect corporation credit financing or not, how does it act on the debt? This paper will attempt to make an empirical study and academic discussions.Based on the characters of Chinese listed companies, this paper takes factors as its study perspective and takes firm size as its thread. Firstly, the thesis provides a review of the literatures on theories system and empirical study of the relationship between firm size and corporation credit financing. And then controlling industry factor and other main firm characters, employing the market and accounting data of Chinese listed companies, it makes a mode to test the relationship between firm size and corporation credit financing. As a result there is a positive relationship between them, which is the bigger the firm size is, the more debt the firm has. At last, the paper put forward the conception of"size discrimination"to explain the mechanism of the empirical result. It holds that size discrimination in the operation of credit and bankruptcy makes the bigger firm have the will and the motivation to take on more liability.