Funding Growth in Bank-Based and Market-Based Financial Systems : Evidence from Firm-Level Data
The authors investigate whether firms' access to external financing, to fund growth differs between market-based, and bank-based financial systems. Using firm-level data for forty countries, they compute the proportion of firms in each country...
| Main Authors: | , |
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2014
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2000/08/693218/funding-growth-bank-based-market-based-financial-systems-evidence-firm-level-data http://hdl.handle.net/10986/19813 |
| Summary: | The authors investigate whether
firms' access to external financing, to fund growth
differs between market-based, and bank-based financial
systems. Using firm-level data for forty countries, they
compute the proportion of firms in each country that relies
on external finance, and examine how that proportion differs
across financial systems. They find that the development of
a country's legal system predicts access to external
finance, and that stock markets, and the banking system have
different effects on access to external markets. The
development of securities markets is related more to the
availability of long-term financing, whereas the development
of the banking sector is related more to the availability of
short-term financing. They find no evidence, however, that
firms' access to external financing is predicted by an
index of the development of stock markets, relative to the
development of the banking system. |
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