Competitive Advantage, China, Institutional Development, Regulation, Sources of Financial Capital
We investigate whetheraccess to different financial capital sources offers competitive advantages inChina's highly regulated market. To identify sources and analyze financialcapital relationships that affect competitive advantages, we study 6750firm-year observations from 2000-2009. Firms gain competitive advantages whenthey can access internal and external financing in equities, bonds andequity-financed capital. Financial industry reforms benefit large private andgovernment-owned firms. Regional institutional developments help to accesssources of external financial capital. Implications include the need tomobilize external financial resources for small and private firms and furtherreform security regulations to ensure fair competition and sustainability.