Financial Constraints Uses Of Funds And Firm Growth And International Comparison

Author : Vojislav Maksimovi?, Asl? Demirgüç-Kunt
Publisher : World Bank Publications
Page : 54 pages
File Size : 52,9 Mb
Release : 1999
Category : Electronic
ISBN : 8210379456XXX

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Financial Constraints, Uses of Funds and Firm Growth: and International Comparison by Vojislav Maksimovi?, Asl? Demirgüç-Kunt Pdf

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.

Author : Aslı Demirgüç-Kunt
Publisher : Unknown
Page : 54 pages
File Size : 48,7 Mb
Release : 1996
Category : Business enterprises
ISBN : UCSD:31822023519374

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Financial Constraints, Uses of Funds, and Firm Growth by Aslı Demirgüç-Kunt Pdf

Author : Vojislav Maksimovic,Asli Demirgüç-Kunt
Publisher : Unknown
Page : 0 pages
File Size : 44,9 Mb
Release : 2005
Category : Electronic
ISBN : OCLC:1375288298

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Financial Constraints, Uses of Funds and Firm Growth by Vojislav Maksimovic,Asli Demirgüç-Kunt Pdf

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.

Author : Vojislav Maksimovic
Publisher : Unknown
Page : 54 pages
File Size : 54,9 Mb
Release : 2016
Category : Electronic
ISBN : OCLC:1290706062

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Financial Constraints, Uses of Funds, and Firm Growth by Vojislav Maksimovic Pdf

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.

Author : Meghana Ayyagari,Asli Demirguc Kunt,Vojislav Maksimovic
Publisher : World Bank Publications
Page : 59 pages
File Size : 46,7 Mb
Release : 2006
Category : Business enterprises
ISBN : 8210379456XXX

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How important are financing constraints? : the role of finance in the business environment by Meghana Ayyagari,Asli Demirguc Kunt,Vojislav Maksimovic Pdf

What role does the business environment play in promoting and restraining firm growth? Recent literature points to a number of factors as obstacles to growth. Inefficient functioning of financial markets, inadequate security and enforcement of property rights, poor provision of infrastructure, inefficient regulation and taxation, and broader governance features such as corruption and macroeconomic stability are discussed without any comparative evidence on their ordering. In this paper, the authors use firm level survey data to present evidence on the relative importance of different features of the business environment. They find that although firms report many obstacles to growth, not all the obstacles are equally constraining. Some affect firm growth only indirectly through their influence on other obstacles, or not at all. Using Directed Acyclic Graph methodology as well as regressions, the authors find that only obstacles related to finance, crime, and political instability directly affect the growth rate of firms. Robustness tests further show that the finance result is the most robust of the three. These results have important policy implications for the priority of reform efforts. They show that maintaining political stability, keeping crime under control, and undertaking financial sector reforms to relax financing constraints are likely to be the most effective routes to promote firm growth.

Author : Thorsten Beck,Asl? Demirgüç-Kunt,Vojislav Maksimovic
Publisher : World Bank Publications
Page : 58 pages
File Size : 47,9 Mb
Release : 2002
Category : Banks and banking
ISBN : 8210379456XXX

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Financial and Legal Constraints to Firm Growth by Thorsten Beck,Asl? Demirgüç-Kunt,Vojislav Maksimovic Pdf

Author : Mr. Ross Levine
Publisher : International Monetary Fund
Page : 80 pages
File Size : 49,9 Mb
Release : 2021-06-11
Category : Business & Economics
ISBN : 9781513583365

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Finance, Growth, and Inequality by Mr. Ross Levine Pdf

Finance and growth emerged as a distinct field of economics during the last three decades as economists integrated the fields of finance and economic growth and then explored the ramifications of the functioning of financial systems on economic growth, income distribution, and poverty. In this paper, I review theoretical and empirical research on the connections between the operation of the financial system and economic growth and inequality. While subject to ample qualifications, the preponderance of evidence suggests that (1) financial development—both the development of banks and stock markets—spurs economic growth and (2) better functioning financial systems foster growth primarily by improving resource allocation and technological change, not by increasing saving rates. Some research also suggests that financial development expands economic opportunities and tightens income distribution, primarily by boosting the incomes of the poor. This work implies that financial development fosters growth by expanding opportunities. Finally, and more tentatively, financial innovation—improvements in the ability of financial systems to ameliorate information and transaction costs—may be necessary for sustaining growth.

Author : Sophia Chen
Publisher : International Monetary Fund
Page : 38 pages
File Size : 54,5 Mb
Release : 2014-05-14
Category : Social Science
ISBN : 9781484393741

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Financial Constraints, Intangible Assets, and Firm Dynamics by Sophia Chen Pdf

I study whether firms' reliance on intangible assets is an important determinant of financing constraints. I construct new measures of firm-level physical and intangible assets using accounting information on U.S. public firms. I find that firms with a higher share of intangible assets in total assets start smaller, grow faster, and have higher Tobin’s q. Asset tangibility predicts firm dynamics and Tobin’s q up to 30 years but has diminishing predicative power. I develop a model of endogenous financial constraints in which firm size and value are limited by the enforceability of financial contracts. Asset tangibility matters because physical and intangible assets differ in their residual value when the contract is repudiated. This mechanism is qualitatively important to explain stylized facts of firm dynamics and Tobin’s q.

Author : Xiaolong Li,Chunhui Yuan,John Kent
Publisher : Springer Nature
Page : 1647 pages
File Size : 43,5 Mb
Release : 2023-06-27
Category : Political Science
ISBN : 9789811978265

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Proceedings of the 6th International Conference on Economic Management and Green Development by Xiaolong Li,Chunhui Yuan,John Kent Pdf

This proceedings book, together with the conference, looks forward to spark inspirations and promote collaborations. International Conference on Economic Management and Green Development (ICEMGD) is an annual conference aiming at bringing together researchers from the fields of economics, business management, public administration, and green development for the sharing of research methods and theoretical breakthroughs. The proceedings consist of papers accepted by the 6th ICEMGD, which are carefully selected and reviewed by professional reviewers from corresponding research fields and the editing committee of the conference. The papers have a diverse range of topics situated at the intersecting field of economic management, public administration, and green development. ICEMGD is working to provide a platform for international participants from fields like macro- and microeconomics, international economics, finance, agricultural economics, health economics, business management and marketing strategies, regional development studies, social governance, and sustainable development. The proceedings will be of interest to researchers, academics, professionals, and policy makers in the field of economic management, public administration, and development studies.

Author : Hamori Shigeyuki,Inoue Takeshi
Publisher : World Scientific
Page : 176 pages
File Size : 50,7 Mb
Release : 2014-09-05
Category : Business & Economics
ISBN : 9789814571920

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Indian Economy: Empirical Analysis On Monetary And Financial Issues In India by Hamori Shigeyuki,Inoue Takeshi Pdf

India's financial sector has undergone significant changes following the start of the economic liberalization in the early 1990s. In addition to providing important information on monetary and financial issues in India, this book also provides examples to analyze a developing economy by using macro-financial data. The book also focuses on three main topics, that is, monetary policy, financial markets and finance-poverty nexus, and provides new insights into these issues by applying some recently developed quantitative techniques.

Author : Damiano Bruno Silipo
Publisher : Springer Science & Business Media
Page : 242 pages
File Size : 50,7 Mb
Release : 2009-04-22
Category : Business & Economics
ISBN : 9783790821123

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The Banks and the Italian Economy by Damiano Bruno Silipo Pdf

Damiano Bruno Silipo In the 1990s the Italian banking system underwent profound normative, institutional and structural changes. The Consolidated Law on Banking (1993) and that on Finance (1998) instituted the legal framework for a far-reaching overhaul of the Italian banking and ?nancial system: signi?cant relaxation of entry barriers, the liberalization of branching, the privatization of the Italian banks, and a massive process of mergers and acquisitions. Following the Bank of Italy’s liberalization of branching in 1990, in 10 years the number of bank branches increased by 70% in Italy, while in the rest of Europe it declined. Over the decade the average number of banks doing business in a province rose from 27 to 31, while a wave of mergers (324 operations) and acquisitions (137) revolutionized the Italian banking industry, reducing the overall number of Italian banks by 30%. To a signi?cant extent this concentration represented take-overs of troubled Southern banks by Central and Northern ones. As a result of these developments (plus a rise in banking productivity and a fall in costs), the spread between short-term lending and deposit rates fell from 7 percentage points in 1990 to 4 points in 1999. And despite an increase in concentration in a number of local credit markets, the interest-rate differential between the locally dominant and other banks generally narrowed.

Author : Abdullahi Dahir Ahmed,Sardar M. N. Islam
Publisher : Springer Science & Business Media
Page : 303 pages
File Size : 54,6 Mb
Release : 2009-10-03
Category : Business & Economics
ISBN : 9783790821680

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Financial Liberalization in Developing Countries by Abdullahi Dahir Ahmed,Sardar M. N. Islam Pdf

The recent global ?nancial crisis has made ?nancial liberalization a topic of great academic and practical interest. This book makes new contributions to the topic by combining fact-?nding, empirical analysis, and theory to examine the relationship between ?nancial liberalization and economic growth. Among its contributions, the book provides detailed country assessments on the effects of ?nancial liberalization, including its striking impact on the banking sector. Although an important goal of ?nancial deregulation has been to help ?nancial institutions better perform their role in intermediating resources, the book models how deregulation may fail to achieve that goal in countries with underdeveloped ?nancial markets and institutions. For that purpose, the book draws on actual experience in Kenya, Malawi, Botswana, and Thailand. This book should constitute important reading for students of ?nancial economics, researchers and general academics, ?nancial practitioners, policymakers, and teachers of economics. North Carolina, USA Steven L. Schwarcz December 2008 Stanley A. Star Professor of Law & Business, Duke University Founding Director, Duke Global Capital Markets Center Durham vii Abstract and Preface The latest global ?nancial and economic crisis of 2008 shows the need to - examine the desirability of ?nancial liberalization and the basis for the view that ?nancial deregulation by itself cannot be considered as a substitute for better economic management. The literature on ?nancial liberalization has identi?ed various mechanisms through which removing controls on interest rates may impact economic growth.

Author : José María Fanelli,Rohinton Medhora
Publisher : IDRC
Page : 384 pages
File Size : 48,6 Mb
Release : 2002
Category : Business & Economics
ISBN : 9781552502174

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Finance and Competitiveness in Developing Countries by José María Fanelli,Rohinton Medhora Pdf

Using detailed trade and firm-level financial data, the authors demonstrate, for example, that while links between finance and competitiveness are strong, they are not uniform across sectors and countries. This book examines the link between finance and competitiveness at the macro and sectoral levels in seven different countries: Argentina, Brazil, India, Indonesia, the Philippines, South Africa, and Tunisia, and investigates key international issues, such as the evidence of the impact of exchange rate variability on trade, patterns in bank lending, and trade openness and development.

Author : Anna Meyendorff,Anjan V. Thakor
Publisher : MIT Press
Page : 340 pages
File Size : 40,8 Mb
Release : 2002
Category : Business & Economics
ISBN : 0262133911

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Designing Financial Systems in Transition Economies by Anna Meyendorff,Anjan V. Thakor Pdf

This collection examines the design of financial systems for central and eastern European countries engaged in the transition to market-based economies. It highlights the need for better approaches to measuring performance and providing incentives in banking and for financial mechanisms to encourage private-sector growth. Written by leading European and North American scholars, the essays apply modern finance theory and empirical data to the development of new financial sectors.

Author : L. Paganetto,E. Phelps
Publisher : Springer
Page : 199 pages
File Size : 47,6 Mb
Release : 2003-01-31
Category : Business & Economics
ISBN : 9781403920232

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Finance, Research, Education and Growth by L. Paganetto,E. Phelps Pdf

A crucial issue in the era of globalisation and internationalization, is whether the relationship between investment and finance is beneficial to growth and development. Received wisdom is that Research and Development is essential not only for maintaining productivity, but also for competing in the marketplace. Similar questions have been raised about education and its rate of 'social return; is education necessary for improving the skill of the workforce, or does it serve primarily to facilitate the adoption of these new technologies? This book brings together a case of leading international scholars to analyze the importance of education, research and human capital and the impact of financial systems on growth and development.