In this paper we study the relationship between firm age, the use of external finance and new investment decisions, in a sample of European firms. We find that younger firms use less bank financing than older firms only in non-EU countries, suggesting that greater financial development and a...

We identify three “crisis shocks” related to key features of the 2007-2008 crisis: (1) the collapse of global demand, (2) the contraction of credit supply, and (3) selling pressure on firms' equity. Using an international cross-section of firms, we analyze whether firms' sensitivities to...

Combining multi-year, firm-level surveys with country-level panel data for 53 countries, this paper explores the impact of bank competition on firms' access to finance. We find that low competition, as measured by high values of the Lerner index, diminishes firms' access to finance, while...

This paper 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...

Recent research studying the link between law and finance has concentrated on country-level investor protection measures and focused on differences in legal systems across countries and legal families. Klapper and Love extend this literature and provide a study of firm-level corporate governance...

This paper studies the effect of financial crises on trade credit in a sample of 890 firms in six emerging economies. We find that although provision of trade credit increases right after the crisis, it consequently collapses in the following months and years. We observe that firms with weaker...

Himmelberg, Hubbard, and Love 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...

Microeconomic evidence from 40 countries shows that financial development aids growth by reducing financing constraints that would otherwise restrict efficient firm investment.The relationship between the financial and real sides of the economy has long been a topic of intense interest and...

This paper evaluates effectiveness of microfinance using Propensity Score Matching (PSM) method applied to data collected in a recent randomized control trial. This method allows one to answer an additional set of questions not answered by the original study and provide more nuanced evidence by...

Recent work suggests that financial development is important for economic growth, since financial markets more effectively allocate capital to firms with high value projects. For firms in poorly developed financial markets, implicit borrowing in the form of trade credit may provide an...