This article examines how a country's legal origin influences the operation of its financial system by using firm-level survey data across a broad cross-section of countries on the obstacles that firms face in raising external finance. Using panel regressions, the article assesses two channels...

This paper examines legal theories of international differences in financial development. The law and finance theory stresses that legal traditions differ in terms of (i) their emphasis on the rights of private property owners vis -à -vis the state and (ii) their ability to adapt to changing...

Recently, developing countries have witnessed a sharp increase in foreign bank participation. The authors examine the impact on banking outreach using newly gathered data for Mexico, where foreign bank participation rose from 2 percent to 83 percent of assets during 1997-2005. Country-, bank-,...

There is a wide cross-country variation in the institutional structure of bank failure resolution, including the role of the deposit insurer. The authors use quantitative analysis for 57 countries and discuss specific country cases to illustrate this variation. Using data for over 1,700 banks...

Using a unique firm-level survey data base, covering fifty four countries, the authors investigate whether different financial, legal, and corruptionissues that firms report as constraints, actually affect their growth rates. The results show that the extent to which these factors constrain a...

This paper reviews different econometric methodologies to assess the relationship between financial development and growth. It illustrates the identification problem, which is at the center of the finance and growth literature, using the example of a simple Ordinary Least Squares estimation. It...

The authors evaluate whether the level of development in the banking sector exerts a causal impact on economic growth and its sources-total factor productivity growth, physical capital accumulation, and private saving. They use (1) a pure cross-country instrumental variable estimator to extract...

The authors analyze the different options-liquidation, federalization, privatization, and restructuring-that the Brazilian state government had for the transformation of state banks under the Programa de Incentivo á Redução do Setor Público Estadual na Atividade Bancária (PROES) in the late...