This chapter reviews and synthesizes theoretical and empirical research on the role of finance in developing countries. First, the paper presents the stylized facts about firms in developing nations as well as the legal, financial, and broader institutional framework in which these firms...

The authors use survey data on a sample of over 10,000 firms from 80 countries to assess (1) how successful a priori classifications are in distinguishing between financially constrained and unconstrained firms, and (2) more generally, the determinants of financing obstacles of firms. They find...