The Impact of the Business Environment on Young Firm Financing

creativeworkseries.issn 1564-698X Chavis, Larry W. Klapper, Leora F. Love, Inessa 2013-05-21T15:59:25Z 2013-05-21T15:59:25Z 2011-10-18
dc.description.abstract A unique dataset of over 70,000 firms, most of which are small, in over 100 countries, is utilized to systematically study the use of different financing sources for new and young firms. Consistent age-related patterns emerge. Across all countries younger firms rely less on bank financing and more on informal financing. There is a clear substitution effect: as firms mature, more firms switch out of informal finance toward bank finance, while the total proportion of firms using external finance remains relatively unchanged. Importantly, these relationships hold for firms of different sizes, firms in different sectors, and firms located in countries with different income levels and on different continents. Thus, these patterns of young firm financing show clear universal tendencies. Given that even small firms increasingly use formal bank financing over time, these results suggest that information asymmetry plays an important role in decreasing a young firm's ability to obtain bank finance. en
dc.identifier.citation World Bank Economic Review
dc.identifier.issn 1564-698X
dc.identifier.other doi:10.1093/wber/lhr045
dc.language.iso en_US
dc.publisher World Bank
dc.relation.ispartofseries World Bank Economic Review
dc.rights CC BY-NC-ND 3.0 IGO
dc.rights.holder World Bank
dc.subject Access to external finance
dc.subject bank financing
dc.subject earnings
dc.subject economic development
dc.subject Entrepreneur
dc.subject Entrepreneurial Finance
dc.subject entrepreneurs
dc.subject external finance
dc.subject financial development
dc.subject formal bank
dc.subject growth opportunities
dc.subject informal finance
dc.subject informal financing
dc.subject information asymmetry
dc.subject internal funds
dc.subject International Bank
dc.subject investment opportunities
dc.subject new business
dc.subject profitability
dc.subject small businesses
dc.title The Impact of the Business Environment on Young Firm Financing en
dc.type Journal Article en
dc.type Article de journal fr
dc.type Artículo de revista es
dspace.entity.type Publication
dspace.entity.type Publication
okr.crosscuttingsolutionarea Jobs 2013-04-18
okr.doctype Journal Article
okr.globalpractice Macroeconomics and Fiscal Management
okr.globalpractice Social Protection and Labor
okr.globalpractice Finance and Markets
okr.globalpractice Trade and Competitiveness
okr.identifier.doi 10.1093/wber/lhr045
okr.journal.nbpages 486-507
okr.language.supported en
okr.peerreview Academic Peer Review
okr.region.geographical Africa
okr.region.geographical Caribbean
okr.region.geographical East Asia
okr.region.geographical North Africa
okr.region.geographical South Asia
okr.region.geographical Middle East
okr.region.geographical Europe and Central Asia
okr.region.geographical Eastern Europe
okr.region.geographical Latin America
okr.topic Finance and Financial Sector Development :: Access to Finance
okr.topic Finance and Financial Sector Development :: Bankruptcy and Resolution of Financial Distress
okr.topic Finance and Financial Sector Development :: Banks & Banking Reform
okr.topic Finance and Financial Sector Development :: Debt Markets
okr.topic Finance and Financial Sector Development :: Financial Intermediation
okr.topic Finance and Financial Sector Development :: Microfinance
okr.topic Macroeconomics and Economic Growth :: Investment and Investment Climate
okr.topic Private Sector Development :: Emerging Markets
okr.topic Private Sector Development :: Microenterprises
okr.topic Private Sector Development :: Small and Medium Size Enterprises
okr.topic Social Protections and Labor :: Labor Policies
okr.volume 25(3)
relation.isJournalIssueOfPublication baa25a54-0559-4483-ae13-74491dd867b4
relation.isJournalOfPublication c41eae2f-cf94-449d-86b7-f062aebe893f
relation.isJournalVolumeOfPublication e0142101-3f2f-4335-8ea0-6dbed470dc64
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