nep-fdg 2007-09-30 papers

on Financial Development and Growth

Issue of 2007‒09‒30
one paper chosen by
Iulia Igescu
Global Insight, GmbH

Financial Development and Growth in Direct Firm-Level Comparisons By Jan Bena,; Stepan Jurajda

Financial Development and Growth in Direct Firm-Level Comparisons

By:	Jan Bena,; Stepan Jurajda
Abstract:	The establishment of the EU-15 'single market' in 1993 brought about a high degree of synchronization of industry shocks, while substantial diversity existed in the development of country-level financial markets. We compare within-industry growth rates of similar 'single-market' firms facing financial systems of different depth and institutional quality as of 1993. Moving from the least to the most developed financial market within the EU- 15 boosts firms' annual value-added growth by about three percentage points. Our results also suggest that the growth gap due to initially under-developed financial systems was closed by 2003.
Keywords:	Financial development, Corporate growth, Access to financial markets.
JEL:	F36 G15 G21 O16 O52
Date:	2007–03
URL:	http://d.repec.org/n?u=RePEc:cer:papers:wp317&r=fdg

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