Download or read book Financial Constraints Uses of Funds and Firm Growth and International Comparison written by Vojislav Maksimovi?, Asl? Demirgüç-Kunt and published by World Bank Publications. This book was released on 1999 with total page 54 pages. Available in PDF, EPUB and Kindle. Book excerpt: 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.
Download or read book Financial Constraints Uses of Funds and Firm Growth written by Aslı Demirgüç-Kunt and published by . This book was released on 1996 with total page 54 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Financial Constraints Uses of Funds and Firm Growth written by Vojislav Maksimovic and published by . This book was released on 2005 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: 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.
Download or read book Financial Constraints Uses of Funds and Firm Growth written by Vojislav Maksimovic and published by . This book was released on 2016 with total page 54 pages. Available in PDF, EPUB and Kindle. Book excerpt: 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.
Download or read book How important are financing constraints the role of finance in the business environment written by Meghana Ayyagari and published by World Bank Publications. This book was released on 2006 with total page 59 pages. Available in PDF, EPUB and Kindle. Book excerpt: 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.
Download or read book formal versus informal finance evidence from china written by Vojislav Maksimovic and published by World Bank Publications. This book was released on 2008 with total page 77 pages. Available in PDF, EPUB and Kindle. Book excerpt: Abstract: China is often mentioned as a counterexample to the findings in the finance and growth literature since, despite the weaknesses in its banking system, it is one of the fastest growing economies in the world. The fast growth of Chinese private sector firms is taken as evidence that it is alternative financing and governance mechanisms that support China's growth. This paper takes a closer look at firm financing patterns and growth using a database of 2,400 Chinese firms. The authors find that a relatively small percentage of firms in the sample utilize formal bank finance with a much greater reliance on informal sources. However, the results suggest that despite its weaknesses, financing from the formal financial system is associated with faster firm growth, whereas fund raising from alternative channels is not. Using a selection model, the authors find no evidence that these results arise because of the selection of firms that have access to the formal financial system. Although firms report bank corruption, there is no evidence that it significantly affects the allocation of credit or the performance of firms that receive the credit. The findings suggest that the role of reputation and relationship based financing and governance mechanisms in financing the fastest growing firms in China is likely to be overestimated.
Download or read book Access to Financial Services written by Stijn Claessens and published by World Bank Publications. This book was released on 2005 with total page 38 pages. Available in PDF, EPUB and Kindle. Book excerpt: "This paper reviews the evidence on the importance of finance for economic well-being, provides data on the degree of use of basic financial services by households and firms across a sample of countries, assesses the desirability of more universal access, and overviews the macroeconomic, legal, and regulatory obstacles to access using general evidence and case studies. Although access to finance can be very beneficial, the data show that universal use is far from prevalent in many countries, especially developing countries. At the same time, universal access has generally not been a public policy objective and is surely not easily achievable in most countries.
Download or read book The Determinants of Financing Obstacles written by and published by World Bank Publications. This book was released on 2004 with total page 36 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Financial Constraints Intangible Assets and Firm Dynamics written by Sophia Chen and published by International Monetary Fund. This book was released on 2014-05-14 with total page 38 pages. Available in PDF, EPUB and Kindle. Book excerpt: 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.
Download or read book Thailand s Corporate Financing and Governance Structures written by Pedro Alba and published by World Bank Publications. This book was released on 1998 with total page 31 pages. Available in PDF, EPUB and Kindle. Book excerpt: November 1998 Weaknesses in corporate governance and the fragile financial structure of many corporations contributed to, and deepened Thailand's recent financial crisis. Large corporations need to reduce their vulnerability to economic shocks and improve corporate governance; smaller firms should achieve a more stable funding structure. Alba, Claessens, and Djankov assess Thailand's policy options for reducing large corporations' vulnerability to economic shocks and improving their corporate governance - and for providing smaller firms a more stable funding structure. Using data for firms listed on Thailand's stock exchange, they empirically assess the relative importance of various factors determining the cost of capital, the availability of financing, and policies and distortions that affect corporate governance in nonfinancial firms. The empirical findings highlight weaknesses in corporate governance and the inherent risks in Thailand's corporate financing structures. They conclude that the most important ask in improving the structure of corporate financing and the framework for corporate governance is to change incentives. This will involve: * Accelerating legal reform, including reform of bankruptcy and foreclosure laws. * Improving bank monitoring of enterprise management and encouraging banks to develop more arm's-length relationships with firms. This will require greater transparency and disclosure of ownership relationships and stricter enforcement of insider and related lending limits, violation of which contributed poor intermediation and the recent crisis. * Improving disclosure and accounting practices. Self-regulatory agencies may need to play more of a role, possibly with more legal power to discipline violators. * Better enforcement of corporate governance rules. The formal structure for corporate governance is standard but enforcement is weak. * Facilitation of equity infusions. Investors - especially minority shareholders - may need to play a more direct role in monitoring and disciplining managers. To attract new infusions of equity, new equity owners may need more-than-proportional representation on the board of directors until other investor protection mechanisms are strengthened. * Improving the framework for corporate governance. A broad public discussion of corporate governance, similar to recent discussions in the United Kingdom and elsewhere, may be needed to clarify the distribution of control in the economy's real sector. * Strengthening institutions responsible for gathering and analyzing data on firms of all sizes and for monitoring firm performance and behavior. This paper-a product of the Economic Policy Unit, Finance, Private Sector, and Infrastructure Network-is part of a larger effort in the network to study the performance and financing structures of East Asian corporations.
Download or read book Global Economic Prospects 2010 written by World Bank and published by World Bank Publications. This book was released on 2010-02-12 with total page 187 pages. Available in PDF, EPUB and Kindle. Book excerpt: 'Global Economic Prospects 2010' presents the World Bank’s latest short-term forecasts and presents evidence that the financial boom played a critical role in the growth boom experienced by developing countries between 2003 and 2007.
Download or read book The Role of Long Term Finance written by Gerard Caprio and published by World Bank Publications. This book was released on 1997 with total page 38 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Aftermath written by Craig Calhoun and published by NYU Press. This book was released on 2011-05 with total page 296 pages. Available in PDF, EPUB and Kindle. Book excerpt: With the specter of prosecution after his term is over and the possibility of disbarment in Arkansas hanging over President Clinton, the Clinton-Lewinsky scandal and the events that have followed it show no sign of abating. The question has become what to do, and how to think, about those eight months. Did the President lie or was it plausible that he had truthfully testified to no sexual relationship? Was the job search for Monica just help for a friend or a sinister means of obtaining silence? Even if all the charges were true, did impeachment follow or was censure enough? And what are the lasting repercussions on the office of the Presidency? Aftermath: The Clinton Impeachment and the Presidency in the Age of Political Spectacle takes a multi-disciplinary approach to analyze the Clinton impeachment from political perspectives across the spectrum. The authors attempt to tease out the meanings of the scandal from the vantage point of law, religion, public opinion, and politics, both public and personal. Further, the impeachment itself is situated broadly within the contemporary American liberal state and mined for the contradictory possibilities for reconciliation it reveals in our culture. Contributors: David T. Canon, John Cooper, Drucilla Cornell, Jean Bethke Elshtain, Robert W. Gordon, Lawrence Joseph, Leonard V. Kaplan, David Kennedy, Kenneth R. Mayer, Beverly I. Moran, Father Richard John Neuhaus, David Novak, Linda Denise Oakley, Elizabeth Rapaport, Lawrence Rosen, Eric Rothstein, Aviam Soifer, Lawrence M. Solan, Cass R. Sunstein, Stephen Toulmin, Leon Trakman, Frank Tuerkheimer, Mark V. Tushnet, Andrew D. Weiner, Robin L. West.
Download or read book Proceedings of the 2023 2nd International Conference on Urban Planning and Regional Economy UPRE 2023 written by Reza Lotfi and published by Springer Nature. This book was released on 2023-08-14 with total page 438 pages. Available in PDF, EPUB and Kindle. Book excerpt: This is an open access book. As a leading role in the global megatrend of scientific innovation, China has been creating a more and more open environment for scientific innovation, increasing the depth and breadth of academic cooperation, and building a community of innovation that benefits all. These endeavors have made new contribution to globalization and creating a community of shared future. To adapt to this changing world and China's fast development in this new era, 2023 2nd International Conference on Urban Planning and Regional Economy (UPRE 2023) is to be held on April 21-23, 2023 in Beijing, China. Urban planning can change the functional structure of a city. Urban planning plays a very important role in regional economic development. Urban planning contains various factors of urban economic development. Urban economic development can effectively improve the speed and quality of urban planning formulation and implementation. The two affect and interact with each other. The meeting will focus on "urban planning" and "regional economy", and discuss their interdependence, mutual promotion and mutual restriction. UPRE 2023 aims to build a platform for scholars to discuss the relationship between urban planning and economy, aims to promote the exchange of different cutting-edge research in the field of information and connection at home and abroad the most advanced academic resources. Conference topics include Traffic management and supply chain, regional policy and local economic transformation, Scenic spot development and tourism economy, Urban modernization and high-tech economy, Environmental protection and sustainable economy, Resource development and industrial structure.
Download or read book How Important Are Financing Constraints The Role of Finance in the Business Environment written by Meghana Ayyagari and published by . This book was released on 2012 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: 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 all discussed without any comparative evidence on their ordering. In this paper, we use firm level survey data to present evidence on the relative importance of different features of the business environment. We 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 (DAG) methodology as well as regressions, we find that only obstacles related to Finance, Crime and Policy 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. Our results show that maintaining policy 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.
Download or read book Financial Development and Economic Growth written by Ross Levine and published by World Bank Publications. This book was released on with total page 84 pages. Available in PDF, EPUB and Kindle. Book excerpt: The International Monetary Fund (IMF) presents the full text of the December 2000 paper entitled "Financial Development and Economic Growth: An Overview," prepared by Mohsin S. Khan and Abdelhak S. Senhadji. The text is available in PDF format and the paper is part of the IMF's Working Paper series. This paper provides a review of literature on financial markets and discusses the relationship between financial development and economic growth.
Download or read book Do Remittances Enhance Financial Inclusion in LMICs and in Fragile States written by Mr.Sami Ben Naceur and published by International Monetary Fund. This book was released on 2020-05-22 with total page 42 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper explores the relationship between remittances and financial inclusion for a sample of 187 countries over the period 2004-2015, using cross-country as well as dynamic panel GMM regressions. At low levels of remittances-to-GDP, these flows act as a substitute to formal financial channels, thereby reducing financial inclusion. In contrast, when remittance-to-GDP ratio is high, above 13% on average, they tend to complement formal access and usage channels, thus enhancing financial inclusion. This “U shaped” relationship highlights the role of remittance flows in financing household consumption at low levels, while raising formal household bank savings and allowing for more intermediation, at high levels of remittance-to-GDP.
