Financial and Legal Institutions and Firm Size
The authors investigate how a country's financial institutions and the quality of its legal system explain the size attained by its largest industrial firms in a sample of 44 countries. Firm size is positively related to the size of the bankin...
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
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World Bank, Washington, DC
2014
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| Online Access: | http://documents.worldbank.org/curated/en/2003/03/2181644/financial-legal-institutions-firm-size http://hdl.handle.net/10986/19157 |
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okr-10986-191572021-04-23T14:03:42Z Financial and Legal Institutions and Firm Size Beck, Thorsten Demirguc-Kunt, Asli Maksimovic, Vojislav ACCOUNTING ADVERSE SELECTION AGENCY PROBLEMS ASSETS BANK CREDIT BANK MONITORING BANKING SECTOR BANKING SECTOR DEVELOPMENT BANKING SYSTEM BANKING SYSTEMS BANKRUPTCY BANKS BENCHMARK CAPITAL MARKETS CAPITALIZATION COMMERCIAL BANKS COMPARATIVE ADVANTAGE CONGLOMERATES CONTRACT ENFORCEMENT CORPORATE FINANCE CORPORATION CORPORATIONS DISEQUILIBRIUM DIVERSIFICATION DIVIDEND POLICY ECONOMIES OF SCALE ENTREPRENEURS EQUILIBRIUM EXPORTS FINANCIAL INSTITUTIONS FINANCIAL PLANNING FINANCIAL SECTOR FINANCIAL SERVICES FINANCIAL STRUCTURE FINANCIAL SYSTEMS FIRM SIZE FIRMS GDP GDP PER CAPITA GROSS DOMESTIC PRODUCT GROSS DOMESTIC PRODUCT PER CAPITA GROWTH RATE HUMAN CAPITAL INEFFICIENCY INFLATION INFLATION RATE INSTITUTIONAL DEVELOPMENT LAWS LEGAL PROTECTION MEDIUM ENTERPRISES NATIONAL INCOME NET SALES OLIGOPOLY OPEN ECONOMIES OPPORTUNITY COSTS ORGANIZATIONAL CAPITAL PER CAPITA INCOMES PRIVATE BANKS PRODUCTIVITY PROFIT RATE PROFITABILITY REAL GDP REORGANIZATION RESOURCE ALLOCATION RETURN ON ASSETS SIZE OF FIRMS SMALL FIRMS TOTAL OUTPUT WAGES WEALTH FINANCIAL INSTITUTIONS LEGAL FRAMEWORK INDUSTRIAL CAPACITY FIRM SIZE LEGAL & REGULATORY FRAMEWORK EXTERNAL FINANCE CREDITOR COUNTRIES CAPITAL INVESTMENTS PROTECTION SYSTEMS The authors investigate how a country's financial institutions and the quality of its legal system explain the size attained by its largest industrial firms in a sample of 44 countries. Firm size is positively related to the size of the banking system and the efficiency of the legal system. Thus, the authors find no evidence that firms are larger in order to internalize the functions of the banking system or to compensate for the general inefficiency of the legal system. But they do find evidence that externally financed firms are smaller in countries that have strong creditor rights and efficient legal systems. This suggests that firms in countries with weak creditor protections are larger in order to internalize the protection of capital investment. 2014-07-31T22:01:50Z 2014-07-31T22:01:50Z 2003-03 http://documents.worldbank.org/curated/en/2003/03/2181644/financial-legal-institutions-firm-size http://hdl.handle.net/10986/19157 English en_US Policy Research Working Paper;No. 2997 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English en_US |
| topic |
ACCOUNTING ADVERSE SELECTION AGENCY PROBLEMS ASSETS BANK CREDIT BANK MONITORING BANKING SECTOR BANKING SECTOR DEVELOPMENT BANKING SYSTEM BANKING SYSTEMS BANKRUPTCY BANKS BENCHMARK CAPITAL MARKETS CAPITALIZATION COMMERCIAL BANKS COMPARATIVE ADVANTAGE CONGLOMERATES CONTRACT ENFORCEMENT CORPORATE FINANCE CORPORATION CORPORATIONS DISEQUILIBRIUM DIVERSIFICATION DIVIDEND POLICY ECONOMIES OF SCALE ENTREPRENEURS EQUILIBRIUM EXPORTS FINANCIAL INSTITUTIONS FINANCIAL PLANNING FINANCIAL SECTOR FINANCIAL SERVICES FINANCIAL STRUCTURE FINANCIAL SYSTEMS FIRM SIZE FIRMS GDP GDP PER CAPITA GROSS DOMESTIC PRODUCT GROSS DOMESTIC PRODUCT PER CAPITA GROWTH RATE HUMAN CAPITAL INEFFICIENCY INFLATION INFLATION RATE INSTITUTIONAL DEVELOPMENT LAWS LEGAL PROTECTION MEDIUM ENTERPRISES NATIONAL INCOME NET SALES OLIGOPOLY OPEN ECONOMIES OPPORTUNITY COSTS ORGANIZATIONAL CAPITAL PER CAPITA INCOMES PRIVATE BANKS PRODUCTIVITY PROFIT RATE PROFITABILITY REAL GDP REORGANIZATION RESOURCE ALLOCATION RETURN ON ASSETS SIZE OF FIRMS SMALL FIRMS TOTAL OUTPUT WAGES WEALTH FINANCIAL INSTITUTIONS LEGAL FRAMEWORK INDUSTRIAL CAPACITY FIRM SIZE LEGAL & REGULATORY FRAMEWORK EXTERNAL FINANCE CREDITOR COUNTRIES CAPITAL INVESTMENTS PROTECTION SYSTEMS |
| spellingShingle |
ACCOUNTING ADVERSE SELECTION AGENCY PROBLEMS ASSETS BANK CREDIT BANK MONITORING BANKING SECTOR BANKING SECTOR DEVELOPMENT BANKING SYSTEM BANKING SYSTEMS BANKRUPTCY BANKS BENCHMARK CAPITAL MARKETS CAPITALIZATION COMMERCIAL BANKS COMPARATIVE ADVANTAGE CONGLOMERATES CONTRACT ENFORCEMENT CORPORATE FINANCE CORPORATION CORPORATIONS DISEQUILIBRIUM DIVERSIFICATION DIVIDEND POLICY ECONOMIES OF SCALE ENTREPRENEURS EQUILIBRIUM EXPORTS FINANCIAL INSTITUTIONS FINANCIAL PLANNING FINANCIAL SECTOR FINANCIAL SERVICES FINANCIAL STRUCTURE FINANCIAL SYSTEMS FIRM SIZE FIRMS GDP GDP PER CAPITA GROSS DOMESTIC PRODUCT GROSS DOMESTIC PRODUCT PER CAPITA GROWTH RATE HUMAN CAPITAL INEFFICIENCY INFLATION INFLATION RATE INSTITUTIONAL DEVELOPMENT LAWS LEGAL PROTECTION MEDIUM ENTERPRISES NATIONAL INCOME NET SALES OLIGOPOLY OPEN ECONOMIES OPPORTUNITY COSTS ORGANIZATIONAL CAPITAL PER CAPITA INCOMES PRIVATE BANKS PRODUCTIVITY PROFIT RATE PROFITABILITY REAL GDP REORGANIZATION RESOURCE ALLOCATION RETURN ON ASSETS SIZE OF FIRMS SMALL FIRMS TOTAL OUTPUT WAGES WEALTH FINANCIAL INSTITUTIONS LEGAL FRAMEWORK INDUSTRIAL CAPACITY FIRM SIZE LEGAL & REGULATORY FRAMEWORK EXTERNAL FINANCE CREDITOR COUNTRIES CAPITAL INVESTMENTS PROTECTION SYSTEMS Beck, Thorsten Demirguc-Kunt, Asli Maksimovic, Vojislav Financial and Legal Institutions and Firm Size |
| relation |
Policy Research Working Paper;No. 2997 |
| description |
The authors investigate how a
country's financial institutions and the quality of its
legal system explain the size attained by its largest
industrial firms in a sample of 44 countries. Firm size is
positively related to the size of the banking system and the
efficiency of the legal system. Thus, the authors find no
evidence that firms are larger in order to internalize the
functions of the banking system or to compensate for the
general inefficiency of the legal system. But they do find
evidence that externally financed firms are smaller in
countries that have strong creditor rights and efficient
legal systems. This suggests that firms in countries with
weak creditor protections are larger in order to internalize
the protection of capital investment. |
| format |
Publications & Research :: Policy Research Working Paper |
| author |
Beck, Thorsten Demirguc-Kunt, Asli Maksimovic, Vojislav |
| author_facet |
Beck, Thorsten Demirguc-Kunt, Asli Maksimovic, Vojislav |
| author_sort |
Beck, Thorsten |
| title |
Financial and Legal Institutions and Firm Size |
| title_short |
Financial and Legal Institutions and Firm Size |
| title_full |
Financial and Legal Institutions and Firm Size |
| title_fullStr |
Financial and Legal Institutions and Firm Size |
| title_full_unstemmed |
Financial and Legal Institutions and Firm Size |
| title_sort |
financial and legal institutions and firm size |
| publisher |
World Bank, Washington, DC |
| publishDate |
2014 |
| url |
http://documents.worldbank.org/curated/en/2003/03/2181644/financial-legal-institutions-firm-size http://hdl.handle.net/10986/19157 |
| _version_ |
1764439346468880384 |