Finance and Economic Opportunity

An influential body of theoretical research and an emerging line of empirical work suggest that the operation of the formal financial system affects the degree to which economic opportunities are defined by talent and initiative rather than by parental wealth and social connections. This paper discusses the theory of how financial markets influence economic opportunity and reviews recent empirical work on the relation between formal financial systems and poverty, income inequality, and economic opportunity. The authors consider recent efforts to measure the ability of households and small enterprises to access financial services, the impact of this access, and the mechanisms through which finance affects poverty and inequality. The authors argue that considerably more research is needed to identify which formal financial sector policies enhance the operation of the financial system in ways that expand the economic horizons of the economically disenfranchised.

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Bibliographic Details
Main Authors: Levine, Ross, Demirgüç-Kunt, Asli
Language:English
Published: World Bank, Washington, DC 2008-01
Subjects:ACCESS BARRIERS, ACCESS TO CAPITAL, ACCESS TO CREDIT, ACCESS TO EXTERNAL FINANCE, ACCESS TO FINANCE, ACCESS TO FINANCIAL SERVICES, ACCURATE ESTIMATE, AFFORDABILITY, ASSET RATIO, ATMS, AUTOMATIC TELLER, AVERAGE GROWTH, BAD BANKS, BANK ACCESS, BANK ACCOUNT, BANK ACCOUNTS, BANK BRANCH, BANK BRANCHES, BANK COMPETITION, BANK REGULATION, BANK SERVICES, BANKING SERVICES, BANKS, BARRIER, BARRIER TO FINANCING, BEQUEST, BEQUESTS, BLACK WORKER, BOND, BONDS, BROAD ACCESS, BUSINESS CYCLE, BUSINESS CYCLES, CAPITAL ACCUMULATION, CAPITAL INVESTMENT, CAPITAL MARKET, CAPITAL MARKETS, CHECKS, COLLATERAL, COMMERCIAL BANKS, COMMUNICATIONS TECHNOLOGY, CONSOLIDATION, CONTRIBUTION, CORPORATE GOVERNANCE, CORRUPTION, CREDIT ALLOCATION, CREDIT CONSTRAINTS, CREDIT INFORMATION, CREDIT PROGRAMS, CREDIT REGISTRIES, CREDIT UNIONS, CREDITOR, CREDITOR RIGHTS, DEPOSIT, DEPOSIT ACCOUNT, DEPOSIT ACCOUNTS, DEPOSIT SERVICES, DEREGULATION, DEVELOPING COUNTRIES, DEVELOPING ECONOMIES, DEVELOPMENT ASSISTANCE, DEVELOPMENT BANKS, DISCRIMINATION, DISTRIBUTION OF INCOME, DISTRIBUTION OF WEALTH, DIVERSIFICATION, DOCUMENTATION REQUIREMENTS, DOUBLE BOTTOM LINE, DUMMY VARIABLE, DUMMY VARIABLES, EARNINGS, ECONOMIC DEVELOPMENT, ECONOMIC GROWTH, ECONOMIC OPPORTUNITIES, ECONOMIC OPPORTUNITY, ECONOMIC PERFORMANCE, ECONOMIC POLICY, EMPLOYERS, EMPLOYMENT, ENTREPRENEUR, ENTREPRENEURIAL ABILITY, ENTREPRENEURIAL ACTIVITY, ENTREPRENEURS, ENTREPRENEURSHIP, EQUALITY OF OPPORTUNITY, EXCLUSION, EXTERNAL FINANCE, FAMILIES, FINANCIAL ACCOUNTS, FINANCIAL ARRANGEMENTS, FINANCIAL ASSETS, FINANCIAL DEPTH, FINANCIAL DEVELOPMENT, FINANCIAL DEVELOPMENTS, FINANCIAL INSTITUTION, FINANCIAL INSTITUTIONS, FINANCIAL INTERMEDIARIES, FINANCIAL MARKET, FINANCIAL MARKETS, FINANCIAL PERFORMANCE, FINANCIAL POLICY, FINANCIAL SECTOR POLICIES, FINANCIAL SECTOR POLICY, FINANCIAL SECTOR REFORMS, FINANCIAL SERVICES, FINANCIAL SYSTEM, FINANCIAL SYSTEMS, FINANCING OBSTACLES, FIRM GROWTH, FIXED COST, FOREIGN BANK, FOREIGN OWNERSHIP, FOREIGN OWNERSHIP OF BANKS, FORMAL FINANCIAL SECTOR, FORMAL FINANCIAL SERVICES, GENERAL POPULATION, GOVERNMENT BANK, GOVERNMENT OWNERSHIP, GOVERNMENT OWNERSHIP OF BANKS, GROSS DOMESTIC PRODUCT, GROWTH OPPORTUNITIES, GROWTH RATE, GROWTH RATES, HOLDING, HOUSEHOLDS, HUMAN CAPITAL, INCOME, INCOME DISTRIBUTION, INCOME GROWTH, INCOME INEQUALITY, INCOME LEVELS, INCOMES, INDICATORS OF ACCESS, INEQUALITY, INFLATION, INFORMATION DISCLOSURE, INFORMATION INFRASTRUCTURES, INTEREST INCOME, INTEREST RATE, INTERNATIONAL BANK, INTERNATIONAL ECONOMICS, INVESTING, INVESTMENT PROJECTS, INVESTMENT RETURNS, LABOR FORCE, LABOR FORCE PARTICIPATION, LARGE BANKS, LAWS, LEGAL CONSTRAINTS, LEGAL ENFORCEMENT, LENDERS, LIQUIDITY, LIQUIDITY RISK, LOAN, LOAN AMOUNT, LOAN APPLICATIONS, LOAN BALANCES, LOCAL BANK, LOCAL BANKS, LOW-INCOME, MACROECONOMICS, MARGINAL COST, MARKET PARTICIPANTS, MEDIUM ENTERPRISES, MICRO DATA, MICRO ENTERPRISES, MICRO-CREDIT, MICROCREDIT, MICROENTERPRISES, MICROFINANCE, MICROFINANCE INSTITUTIONS, MIDDLE EAST, MONEY MARKET, MONEY MARKET MUTUAL FUNDS, MONOPOLIES, MONOPOLY, MUTUAL FUNDS, NORTH AFRICA, OUTREACH, PHYSICAL ACCESS, POLITICAL ECONOMY, POSTAL SAVINGS, POVERTY ALLEVIATION, PRIVATE CREDIT, PROFIT MARGINS, PROVISION OF CREDIT, PUBLIC POLICY, RATE OF RETURN, REGULATORS, RENTS, RETURN ON ASSETS, RETURN ON SAVINGS, RISK DIVERSIFICATION, RISK MANAGEMENT, SAVINGS, SAVINGS BANKS, SAVINGS BEHAVIOR, SCHOOL FINANCE, SECURITIES, SECURITIES MARKETS, SELF-EXCLUSION, SENIOR, SMALL ENTERPRISES, SMALLER ENTERPRISES, SMALLER FIRMS, SUB-SAHARAN AFRICA, SUPERVISORY POWER, TRANSACTION, TRANSACTION COSTS, TRANSACTIONS COSTS, TRANSFER PAYMENTS, WAGE, WAGE RATES, WORK FORCE, WORTH,
Online Access:http://documents.worldbank.org/curated/en/2008/01/8922449/finance-economic-opportunity
https://hdl.handle.net/10986/6438
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