Financial And Legal Constraints To Firm Growth
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Financial And Legal Constraints To Firm Growth
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Author : Thorsten Beck
language : en
Publisher: World Bank Publications
Release Date : 2002
Financial And Legal Constraints To Firm Growth written by Thorsten Beck and has been published by World Bank Publications this book supported file pdf, txt, epub, kindle and other format this book has been release on 2002 with Banks and banking categories.
Financial And Legal Constraints To Firm Growth
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Author : Thorsten Beck
language : en
Publisher:
Release Date : 2002
Financial And Legal Constraints To Firm Growth written by Thorsten Beck and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2002 with Banks and banking categories.
Financial And Legal Constraints To Firm Growth
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Author : Thorsten Beck
language : en
Publisher:
Release Date : 2013
Financial And Legal Constraints To Firm Growth written by Thorsten Beck and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2013 with categories.
Using a unique firm-level survey data base, covering fifty four countries, the authors investigate whether different financial, legal, and corruption issues that firms report as constraints, actually affect their growth rates. The results show that the extent to which these factors constrain a firm's growth depends very much on its size, and that it is consistently the smallest firms that are most adversely affected by all these constraints. Firm growth is more affected by reported constraints in countries with underdeveloped financial, and legal systems, and higher corruption. So, policy measures to improve financial, and legal development, and reduce corruption are well justified in promoting firm growth, particularly the development of the small, and medium enterprise sector. But the evidence also shows that the intuitive descriptors of an "efficient" legal system, are not correlated with the components of the general legal constraints that predict firm growth. This finding suggests that the mechanism by which the legal system affects firm performance, is not well understood. The authors' findings also provide evidence that the corruption of bank officials, constraints firm growth. This "institutional failure" should be taken into account, when modeling the monitoring role of financial institutions in overcoming market failures due to informational asymmetries.
Financial And Legal Constraints To Firm Growth
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Author : Vojislav Maksimovic
language : en
Publisher:
Release Date : 2016
Financial And Legal Constraints To Firm Growth written by Vojislav Maksimovic and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2016 with categories.
Using a unique firm-level survey data base covering 54 countries, Beck, Demirguc-Kunt, and Maksimovic investigate whether different financial, legal, and corruption issues that firms report as constraints actually affect their growth rates. The results show that the extent to which these factors constrain a firm's growth depends very much on its size and that it is consistently the smallest firms that are most adversely affected by all three constraints. Firm growth is more affected by reported constraints in countries with underdeveloped financial and legal systems and higher corruption. So, policy measures to improve financial and legal development and reduce corruption are well justified in promoting firm growth, particularly the development of the small and medium enterprise sector. But the evidence also shows that the intuitive descriptors of an quot;efficientquot; legal system are not correlated with the components of the general legal constraints that predict firm growth. This finding suggests that the mechanism by which the legal systems affects firm performance is not well understood. The authors' findings also provide evidence that the corruption of bank officials constrains firm growth. This quot;institutional failurequot; should be taken into account when modeling the monitoring role of financial institutions in overcoming market failures due to informational asymmetries.This paper - a product of Finance, Development Research Group - is part of a larger effort in the group to understand the link from the financial sector to economic development. The authors may be contacted at [email protected], [email protected], or [email protected].
Financial Constraints Uses Of Funds And Firm Growth And International Comparison
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Author : Vojislav Maksimovi?, Asl? Demirgüç-Kunt
language : en
Publisher: World Bank Publications
Release Date : 1999
Financial Constraints Uses Of Funds And Firm Growth And International Comparison written by Vojislav Maksimovi?, Asl? Demirgüç-Kunt and has been published by World Bank Publications this book supported file pdf, txt, epub, kindle and other format this book has been release on 1999 with categories.
October 1996 The findings suggest that across very different financial systems, financial markets and intermediaries have a comparative advantage in funding short-term investment. An active, though not necessarily large, stock market and high scores on an index of respect for legal norms are associated with faster than predicted rates of firm growth. Government subsidies to industry do not increase the proportion of firms growing faster than predicted. Demirgüç-Kunt and Maksimovic focus on two issues. First, they examine whether firms in different countries finance long-term and short-term investment similarly. Second, they investigate whether differences in financial systems and legal institutions across countries are reflected in the ability of firms to grow faster than they might have by relying on their internal resources or short-term borrowing. Across their sample, they find: * Positive correlations between investment in plant and equipment and retained earnings. * Negative correlations between investment in plant and equipment and external financing. * Negative correlations between investment in short-term assets and retained earnings. * Positive correlations between investment in short-term assets and external financing. These findings suggest that across very different financial systems, financial markets and intermediaries have a comparative advantage in funding short-term investment. For each firm in their sample, they estimate a predicted rate at which it can grow if it does not rely on long-term external financing. They show that the proportion of firms that grow faster than the predicted rate in each country is associated with specific features of the legal system, financial markets, and institutions. An active, though not necessarily large, stock market and high scores on an index of respect for legal norms are associated with faster than predicted rates of firm growth. They present evidence that the law-and-order index measures the ability of creditors and debtors to enter into long-term contracts. Government subsidies to industry do not increase the proportion of firms growing faster than predicted. This paper - a product of the Finance and Private Sector Development Division, Policy Research Department - is part of a larger effort in the department to understand the impact of financial constraints on firm growth.
Financial Constraints Uses Of Funds And Firm Growth
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Author : Vojislav Maksimovic
language : en
Publisher:
Release Date : 2016
Financial Constraints Uses Of Funds And Firm Growth written by Vojislav Maksimovic and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2016 with categories.
The findings suggest that across very different financial systems, financial markets and intermediaries have a comparative advantage in funding short-term investment. An active, though not necessarily large, stock market and high scores on an index of respect for legal norms are associated with faster than predicted rates of firm growth. Government subsidies to industry do not increase the proportion of firms growing faster than predicted.Demirguc-Kunt and Maksimovic focus on two issues. First, they examine whether firms in different countries finance long-term and short-term investment similarly. Second, they investigate whether differences in financial systems and legal institutions across countries are reflected in the ability of firms to grow faster than they might have by relying on their internal resources or short-term borrowing.Across their sample, they find:- Positive correlations between investment in plant and equipment and retained earnings.- Negative correlations between investment in plant and equipment and external financing.- Negative correlations between investment in short-term assets and retained earnings.- Positive correlations between investment in short-term assets and external financing.These findings suggest that across very different financial systems, financial markets and intermediaries have a comparative advantage in funding short-term investment.For each firm in their sample, they estimate a predicted rate at which it can grow if it does not rely on long-term external financing. They show that the proportion of firms that grow faster than the predicted rate in each country is associated with specific features of the legal system, financial markets, and institutions.An active, though not necessarily large, stock market and high scores on an index of respect for legal norms are associated with faster than predicted rates of firm growth.They present evidence that the law-and-order index measures the ability of creditors and debtors to enter into long-term contracts. Government subsidies to industry do not increase the proportion of firms growing faster than predicted.This paper - a product of the Finance and Private Sector Development Division, Policy Research Department - is part of a larger effort in the department to understand the impact of financial constraints on firm growth.
Financial Constraints Uses Of Funds And Firm Growth
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Author : Vojislav Maksimovic
language : en
Publisher:
Release Date : 2005
Financial Constraints Uses Of Funds And Firm Growth written by Vojislav Maksimovic and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2005 with categories.
In this paper we focus on two issues. First, we examine whether firms in a thirty country sample finance long-term and short-term investment similarly. Second, we investigate whether perceived differences in the efficiency of the legal systems and in financial institutions across countries are reflected in the ability of firms to obtain external financing and grow at rates greater than they could attain by relying on their internal resources or short-term borrowing. Across our sample, we find positive correlations between investment in plant and equipment and retained earnings, and negative correlations between investment in plant and equipment and external financing. We find negative correlations between investment in short-term assets and retained earnings, and positive correlations between investment in short-term assets and external financing. The findings suggest that across different legal and financial systems, financial markets and intermediaries have a comparative advantage in funding short-term investment. For each firm our sample we estimate a predicted rate at which it can grow if it does not rely on long-term external financing. We show that the proportion of firms that grow at rates exceeding this predicted rate in each country is associated with specific features of the legal system, financial markets and institutions. In countries whose legal systems score high on the efficiency index a greater proportion of firms use long-term external financing, in particular, long-term debt. An active, though not necessarily large, stock market and a large banking sector are also associated with externally financed firm growth. In our sample government subsidies to industry to not increase the proportion of firms growing at rates that exceed the predicted rate.
Financial Constraints Uses Of Funds And Firm Growth
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Author : Aslı Demirgüç-Kunt
language : en
Publisher:
Release Date : 1996
Financial Constraints Uses Of Funds And Firm Growth written by Aslı Demirgüç-Kunt and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 1996 with Business enterprises categories.
Identifying Binding Constraints To Growth
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Author : Mr.Mauricio Vargas
language : en
Publisher: International Monetary Fund
Release Date : 2015-01-14
Identifying Binding Constraints To Growth written by Mr.Mauricio Vargas and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2015-01-14 with Business & Economics categories.
As emphasized by Hausmann, Rodrik and Velasco, the policy challenge of boosting growth requires prioritization and identifying what are the most binding constraints. This paper draws on firm-level data from the World Bank Enterprise Survey, which suggests that the obstacles for the functioning of firms is related to firm size. Recognizing the potential endogeneity and simultaneity between firms' constraints and firm size, we implement an Ordered-Probit model with a potential categorical endogenous regressor to estimate, for the case of Bolivia, the conditional probability of facing obstacles given the firm size category, while controlling for other factors. The results confirm the importance of allowing for the roles of firm size in identifying constraints and suggest priorities for policies to remove constraints to economic performance.
Identifying Binding Constraints To Growth
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Author : Mr.Mauricio Vargas
language : en
Publisher: International Monetary Fund
Release Date : 2015-01-14
Identifying Binding Constraints To Growth written by Mr.Mauricio Vargas and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2015-01-14 with Business & Economics categories.
As emphasized by Hausmann, Rodrik and Velasco, the policy challenge of boosting growth requires prioritization and identifying what are the most binding constraints. This paper draws on firm-level data from the World Bank Enterprise Survey, which suggests that the obstacles for the functioning of firms is related to firm size. Recognizing the potential endogeneity and simultaneity between firms' constraints and firm size, we implement an Ordered-Probit model with a potential categorical endogenous regressor to estimate, for the case of Bolivia, the conditional probability of facing obstacles given the firm size category, while controlling for other factors. The results confirm the importance of allowing for the roles of firm size in identifying constraints and suggest priorities for policies to remove constraints to economic performance.