The authors examine whether financial development boosts the growth of small firms more than large firms and hence provides information on the mechanisms through which financial development fosters aggregate economic growth. They define an industry's technological firm size as the firm size implied by industrial specific production technologies, including capital intensities and scale economies. Using cross-industry, cross-country data, the results indicate that financial development exerts a disproportionately large effect on the growth of industries that are technologically more dependent on small firms. This suggests that financial development accelerates economic growth by removing growth constraints on small firms and also implies that financial development has sectoral as well as aggregate growth ramifications.
Bibliographic Details
| Main Authors: |
Laeven, Luc,
Beck, Thorsten,
Levine, Ross,
Demirguc-Kunt, Asli |
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| Language: | English
en_US |
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| Published: |
World Bank, Washington, DC
2005-01
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| Subjects: | ACCOUNTING,
ACCOUNTING STANDARDS,
ASSETS,
BENCHMARK,
CAPITALIZATION,
CENTRAL BANK,
COMPARATIVE STUDIES,
CONTRACT ENFORCEMENT,
ECONOMETRICS,
ECONOMIC DEVELOPMENT,
ECONOMIC GROWTH,
ECONOMIC SIZE,
ECONOMIES OF SCALE,
EFFICIENCY IMPROVEMENTS,
EMPLOYMENT,
ENDOGENEITY,
EXPORTS,
FAMILIES,
FINANCIAL MARKETS,
FINANCIAL SECTOR,
FINANCIAL SERVICES,
FINANCIAL SYSTEMS,
FIXED COSTS,
GDP,
GDP PER CAPITA,
GROWTH RATE,
HIGH LEVELS,
HUMAN CAPITAL,
INNOVATION,
INSTITUTIONAL DEVELOPMENT,
INTANGIBLE ASSETS,
INTERMEDIARIES,
INTERNATIONAL TRADE,
LABOR MARKETS,
LIQUIDITY,
MONOPOLIES,
MORTALITY,
NET SALES,
PRIVATE PROPERTY,
PRIVATE SECTOR,
PROPERTY RIGHTS,
PUBLIC POLICIES,
RISK MANAGEMENT,
SAVINGS,
TRANSACTION COSTS,
TRANSACTIONS COSTS,
VALUE ADDED,
WORKERS, |
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| Online Access: | http://documents.worldbank.org/curated/en/2005/01/5588007/finance-firm-size-growth
https://hdl.handle.net/10986/8959
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