Publication:
Financial Structure and Economic Development : Firm, Industry, and Country Evidence

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dc.contributor.authorLevine, Ross
dc.contributor.authorBeck, Thorsten
dc.contributor.authorMaksimovic, Vojislav
dc.contributor.authorDemirguc-Kunt, Asli
dc.date.accessioned2014-08-28T15:00:25Z
dc.date.available2014-08-28T15:00:25Z
dc.date.issued2000-08
dc.description.abstractThe authors explore the relationship between financial structure - the degree to which a financial system is market- or bank-based - and economic development. They use three methodologies: 1) The cross-country approach uses cross-country data to assess whether economies grow faster with market- or bank-based systems. 2) The industry approach uses a country-industry panel to assess whether industries that depend heavily on external financing grow faster in market- or ban-based financial systems, and whether financial structure influences the rate at which new firms are created. 3) The firm-level approach uses firm-level data across a broad selection of countries to test whether firms are more likely to grow beyond the rate predicted by internal resources, and short-term borrowings in market- or bank-based financial systems. The cross-country regressions, the industry panel estimations, and the firm-level analyses, provide remarkably consistent conclusions: a) Financial structure is not an analytically useful way to distinguish financial systems. b) Financial structure does not help us understand economic growth, industrial performance, or firm expansion. c) The results are inconsistent with both market-based and bank-based views. In other words, economies do not grow faster, industries dependent on external financing do not expand faster, new firms are not created more easily, firms' access to external finance is not greater, and, firms do not grow faster in either market- or bank-based financial systems. The authors find overwhelming evidence that the overall level of financial development, and the legal environment in which financial intermediaries, and markets operate, critically influence economic development.en
dc.identifierhttp://documents.worldbank.org/curated/en/2000/08/693232/financial-structure-economic-development-firm-industry-country-evidence
dc.identifier.doi10.1596/1813-9450-2423
dc.identifier.urihttps://hdl.handle.net/10986/19809
dc.languageEnglish
dc.language.isoen_US
dc.publisherWorld Bank, Washington, DC
dc.relation.ispartofseriesPolicy Research Working Paper;No. 2423
dc.rightsCC BY 3.0 IGO
dc.rights.urihttp://creativecommons.org/licenses/by/3.0/igo/
dc.subjectACCOUNTING STANDARDS
dc.subjectACCOUNTING SYSTEMS
dc.subjectANNUAL GROWTH
dc.subjectANNUAL GROWTH RATE
dc.subjectAVERAGE DATA
dc.subjectBANK CREDIT
dc.subjectBANKING SECTOR
dc.subjectBANKING SYSTEM
dc.subjectBANKS
dc.subjectBLACK MARKET
dc.subjectBLACK MARKET PREMIUM
dc.subjectBUREAUCRATIC EFFICIENCY
dc.subjectCAPITAL ACCUMULATION
dc.subjectCAPITALIZATION
dc.subjectCIVIL LAW
dc.subjectCOMMON LAW
dc.subjectCONTRACT ENFORCEMENT
dc.subjectCORPORATE PROFITS
dc.subjectCORRUPTION
dc.subjectCOUNTRY CHARACTERISTICS
dc.subjectCOUNTRY COMPARISONS
dc.subjectCOUNTRY DATA
dc.subjectCOUNTRY LEVEL
dc.subjectCOUNTRY REGRESSIONS
dc.subjectCROSS-COUNTRY EVIDENCE
dc.subjectCROSS-COUNTRY SAMPLE
dc.subjectDESCRIPTIVE STATISTICS
dc.subjectDEVELOPMENT INDICATORS
dc.subjectDEVELOPMENT RESEARCH
dc.subjectDIVERSIFICATION
dc.subjectECONOMIC ACTIVITY
dc.subjectECONOMIC DEVELOPMENT
dc.subjectECONOMIC GROWTH
dc.subjectECONOMIC PERFORMANCE
dc.subjectECONOMIC THEORY
dc.subjectERROR TERM
dc.subjectERROR TERMS
dc.subjectEXPLANATORY VARIABLES
dc.subjectEXPORTS
dc.subjectFINANCIAL DEVELOPMENT
dc.subjectFINANCIAL SECTOR
dc.subjectFINANCIAL SECTORS
dc.subjectFINANCIAL SERVICES
dc.subjectFINANCIAL STRUCTURE
dc.subjectFINANCIAL SYSTEM
dc.subjectFINANCIAL SYSTEMS
dc.subjectGDP
dc.subjectGROWTH DETERMINANTS
dc.subjectGROWTH RATE
dc.subjectGROWTH RATES
dc.subjectGROWTH REGRESSION
dc.subjectGROWTH REGRESSIONS
dc.subjectINCOME
dc.subjectINCOME COUNTRIES
dc.subjectINEFFICIENCY
dc.subjectINFLATION
dc.subjectINFLATION RATE
dc.subjectLARGE SHAREHOLDERS
dc.subjectLAWS
dc.subjectLEGAL ORIGIN
dc.subjectLEGAL PROTECTION
dc.subjectLEGAL SYSTEM
dc.subjectLEGAL SYSTEMS
dc.subjectLIBERTIES
dc.subjectLIQUIDATION
dc.subjectLIQUIDITY
dc.subjectLONG-RUN GROWTH
dc.subjectMACROECONOMIC STABILITY
dc.subjectMARKET CAPITALIZATION
dc.subjectNATIONAL OUTPUT
dc.subject0 HYPOTHESIS
dc.subjectOVERHEAD COSTS
dc.subjectPOLICY MAKERS
dc.subjectPOLICY RESEARCH
dc.subjectPRIVATE SECTOR
dc.subjectPRODUCTIVITY
dc.subjectPRODUCTIVITY GROWTH
dc.subjectREORGANIZATION
dc.subjectRESOURCE ALLOCATION
dc.subjectREVERSE CAUSALITY
dc.subjectRISK MANAGEMENT
dc.subjectRULE OF LAW
dc.subjectSAVINGS
dc.subjectSAVINGS RATES
dc.subjectSHAREHOLDERS
dc.subjectSTOCK PRICES
dc.titleFinancial Structure and Economic Development : Firm, Industry, and Country Evidenceen
dspace.entity.typePublication
okr.crosscuttingsolutionareaJobs
okr.crossref.titleFinancial Structure and Economic Development: Firm, Industry, and Country Evidence
okr.date.disclosure2000-08-31
okr.date.doiregistration2025-04-10T09:58:33.405850Z
okr.doctypePublications & Research::Policy Research Working Paper
okr.doctypePublications & Research
okr.docurlhttp://documents.worldbank.org/curated/en/2000/08/693232/financial-structure-economic-development-firm-industry-country-evidence
okr.globalpracticeMacroeconomics and Fiscal Management
okr.globalpracticeSocial Protection and Labor
okr.globalpracticePoverty
okr.globalpracticeGovernance
okr.guid955641468761673605
okr.identifier.doi10.1596/1813-9450-2423
okr.identifier.externaldocumentum000094946_00090905311346
okr.identifier.internaldocumentum693232
okr.identifier.reportWPS2423
okr.language.supporteden
okr.pdfurlhttp://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2000/10/13/000094946_00090905311346/Rendered/PDF/multi_page.pdfen
okr.sectorFinancial Sector Development
okr.sectorFinance
okr.topicPoverty Reduction::Achieving Shared Growth
okr.topicEconomic Theory and Research
okr.topicBanks and Banking Reform
okr.topicSocial Protections and Labor::Labor Policies
okr.topicMacroeconomics and Economic Growth::Macroeconomic Management
okr.topicPayment Systems and Infrastructure
okr.topicGovernance::Governance Indicators
okr.topicFiscal and Monetary Policy
okr.unitFinance, Development Research Group
okr.volume1
relation.isAuthorOfPublication4694cd5a-bd90-594b-abe2-f5b681139e6d
relation.isAuthorOfPublication234a20c0-893c-561a-8c90-6f5be5be5b9b
relation.isAuthorOfPublication.latestForDiscovery4694cd5a-bd90-594b-abe2-f5b681139e6d
relation.isSeriesOfPublication26e071dc-b0bf-409c-b982-df2970295c87
relation.isSeriesOfPublication.latestForDiscovery26e071dc-b0bf-409c-b982-df2970295c87
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