Although ideas production plays a critical role for growth, there has been only a modicum of research on the role played by financial forces in fostering new inventions. Drawing on Schumpeterian growth theory, this paper tests the roles of risk capital and private credit in stimulating knowledge...

This paper investigates cross-country evidence on how capital markets affect business cycle volatilities. In contrast to the large and growing literature of finance and growth, empirical work on the relationship between finance, particularly capital markets, and volatility has been relatively...

This paper investigates the relationships of capital market, severity of economic contraction, and probability of an economic downturn. The finding supports a theoretical prediction that countries with more advanced capital markets would face less severe business cycle output contraction, and a...

This paper investigates the relationships of capital markets, frequency of recession, and fraction of time the economy is in recession. The main finding is that frequency of recession is not robustly linked to measures of capital market development. However, the fraction of time the economy...

This paper examines the sensitivity of investment to available cash-stock, a measure for internal funds, for 192 listed non-financial firms of Bangladesh from 1992 to 2002. The empirical results show that smaller firms have greater financing constraints to investment than larger firms due to...