The relationship between the financial, and real sides of the economy has long been a topic of intense interest, and debate. The author provides microeconomic evidence that financial development aids growth, by reducing financing constraints that would otherwise restrict efficient firm...

Firms often cite financing constraints as one of their primary obstacles to investment. Global capital flows, by bringing in scarce capital, may ease the financing constraints of host country firms. But if incoming foreign investors borrow heavily from domestic banks, foreign direct investment...

Recent empirical work has shown that financial development is important for economic growth, since well-developed financial markets are more effective at allocating capital to firms with high-value projects. This raises the question of whether firms with high return projects in countries with...

The authors combine firm-level data from the World Bank Business Environment Survey (WBES) with data on private and public credit registries to investigate whether the presence of a credit registry in a country is associated with lower financing constraints, as perceived by managers, and with...

The authors study the effect of financial crises on trade credit in a sample of 890 firms in six emerging economies. They find that although provision of trade credit increases right after the crisis, it consequently collapses in the following months and years. The authors observe that firms...

The authors apply vector autoregression to firm-level panel data from 36 countries to study the dynamic relationship between firms'financial conditions and investment. They argue that by using orthogonalized impulse-response functions they are able to separate the"fundamental factors"(such as...

Using firm-level data from 52 countries, the authors investigate how a country's institutions and business environment affect firms'organizational choices and the effects of organizational form on access to finance and growth. They find that businesses are more likely to choose the corporate...

The authors combine the agency theory of the firm with risk diversification incentives for insiders. Principal-agent problems between insiders and outsiders force insiders to retain a larger share in their firm than they would under a perfect risk diversification strategy. The authors predict...

The author presents an analysis of the finances of Egyptian listed companies evaluating recent trends in growth and profitability during the 1995-2001 period. The data from financial statements reveal the effect of the economic slowing of the past few years, especially in the construction and...

The authors reexamine the role of financial market development in the intersectoral allocation of resources. First, they characterize the assumptions underlying previous work in this area, in particular, that of Rajan and Zingales (1998). The authors argue that Rajan and Zingales (1998)...