Constrained Access To Financing Sources:the Potential Growth Of Italian Companies In China

Today establishing and running a business in China offers opportunities and challenges. The possibility to access to financing sources has a large stake in the success or failure of the firms in China. Therefore, the purpose of the research is to understand how the inefficiencies of the Chinese financial system affect the choices Italian joint ventures and wholly owned companies make to finance their growth in China. Quantitative and qualitative methods are combined to understand what sources of financing Italian companies use in China and the reasons behind these choices. The findings show that company size has positive impact on the access to external financing and that joint ventures have better relationships with the Chinese local banks. Finally, the literature about internationalization, capital structure choices and growth has built the support to create a model that describes the potential growth of Italian companies in China in function of their profitability and ability to access external financing.