Publication:
Unbundling Institutions for External Finance: Worldwide Firm-Level Evidence

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dc.contributor.authorKnack, Steve
dc.contributor.authorXu, Lixin Colin
dc.date.accessioned2015-07-14T21:31:36Z
dc.date.available2015-07-14T21:31:36Z
dc.date.issued2015-06
dc.description.abstractThe empirical literature on institutions and development has been challenged on grounds of reverse causality, measurement error in institutional indicators, and heterogeneity. This paper uses firm-level data across countries to confront these challenges. Instead of analyzing ultimate outcomes, such as income levels where institutional quality is likely endogenous, the focus is on firm-level external finance. Moreover, institutions are “unbundled” to explore how various types of institutions affect external finance differently. The paper documents that micro firms have significantly less access to external finance than small and medium firms. General financial development and contracting institutions that facilitate transactions between private parties exert little effect, on average, on firms’ access to external finance. In contrast, property rights institutions that constrain political and economic elites exhibit stronger positive association with access to external finance. The analysis finds evidence of attenuation bias associated with error in measuring institutions. For leveling the playing field between elite and non-elite firms (as proxied by firm size) in their access to external finance, property rights institutions also figure more prominently—with an important exception for the information environment, a component of contracting institutions. The results indicate that a specific channel through which development is affected more by property rights institutions rather than contracting institutions is external financing for firms.en
dc.identifierhttp://documents.worldbank.org/curated/en/2015/06/24578640/unbundling-institutions-external-finance-worldwide-firm-level-evidence
dc.identifier.doi10.1596/1813-9450-7287
dc.identifier.urihttps://hdl.handle.net/10986/22160
dc.languageEnglish
dc.language.isoen_US
dc.publisherWorld Bank, Washington, DC
dc.relation.ispartofseriesPolicy Research Working Paper;No. 7287
dc.rightsCC BY 3.0 IGO
dc.rights.holderWorld Bank
dc.rights.urihttp://creativecommons.org/licenses/by/3.0/igo/
dc.subjectDEPOSIT
dc.subjectBORROWER
dc.subjectCONTRACT RIGHTS
dc.subjectECONOMIC GROWTH
dc.subjectTRADE CREDIT
dc.subjectCHECKS
dc.subjectPEOPLE
dc.subjectDEFAULTS
dc.subjectCONFLICT OF INTEREST
dc.subjectFINANCING
dc.subjectSTOCK
dc.subjectBRIBES
dc.subjectMICRO-ENTERPRISES
dc.subjectINTEREST
dc.subjectCORPORATE INSIDERS
dc.subjectBIAS
dc.subjectPROPERTY RIGHTS
dc.subjectPRIVATE CREDIT
dc.subjectEXCHANGE
dc.subjectSTOCK MARKET
dc.subjectEQUITY MARKET
dc.subjectDEBTOR
dc.subjectBANKING SYSTEMS
dc.subjectACCESS TO EXTERNAL FINANCE
dc.subjectDEPOSIT MONEY BANKS
dc.subjectREINVESTMENT RATES
dc.subjectLOAN
dc.subjectCREDIT ALLOCATION
dc.subjectFORMAL FINANCE
dc.subjectENDOWMENT
dc.subjectBORROWERS
dc.subjectPRIVATE PROPERTY
dc.subjectCORRUPTION
dc.subjectBANKRUPTCY
dc.subjectCENTRAL BANKS
dc.subjectINTERNATIONAL BANK
dc.subjectCREDITORS
dc.subjectINFLATION
dc.subjectCREDITOR
dc.subjectLENDER
dc.subjectCREDIT BANK
dc.subjectCAPITAL FINANCE
dc.subjectINSTRUMENTS
dc.subjectDISPUTE RESOLUTION
dc.subjectCREDIBILITY
dc.subjectACCESS TO INVESTMENT
dc.subjectEXTERNAL FINANCE
dc.subjectBIASES
dc.subjectSMALL BUSINESS
dc.subjectJUDICIAL INDEPENDENCE
dc.subjectSAVINGS
dc.subjectEQUAL TREATMENT
dc.subjectMARKET DEVELOPMENT
dc.subjectGROWTH OPPORTUNITIES
dc.subjectCONTRACTS
dc.subjectINFORMAL FINANCE
dc.subjectCORPORATE FINANCE
dc.subjectINVESTMENT FUNDS
dc.subjectPAYMENT
dc.subjectFINANCIAL INSTITUTIONS
dc.subjectMARKETS
dc.subjectDEBT
dc.subjectFINANCIAL REGULATIONS
dc.subjectINFLATION RATE
dc.subjectCREDITOR RIGHTS
dc.subjectLENDERS
dc.subjectLOCAL STOCK MARKET
dc.subjectINCOME LEVELS
dc.subjectFIXED ASSET
dc.subjectENTERPRISES
dc.subjectBANK CREDIT
dc.subjectGROSS DOMESTIC PRODUCT
dc.subjectRULE OF LAW
dc.subjectFINANCIAL SYSTEM
dc.subjectLEGAL FRAMEWORK
dc.subjectBANK FINANCING
dc.subjectFINANCE
dc.subjectMICRO ENTERPRISES
dc.subjectBANKS
dc.subjectINFORMATION ASYMMETRY
dc.subjectJUDICIAL SYSTEM
dc.subjectTRANSACTIONS
dc.subjectMINORITY SHAREHOLDER PROTECTION
dc.subjectBANKRUPTCY LAWS
dc.subjectEQUITY
dc.subjectINVESTORS
dc.subjectHUMAN CAPITAL
dc.subjectPROPERTY RIGHT
dc.subjectGOOD
dc.subjectCAPITAL
dc.subjectTRANSPARENCY
dc.subjectCOUNTRY RISK
dc.subjectACCESS TO FINANCE
dc.subjectEXPROPRIATION RISK
dc.subjectBANK
dc.subjectRETURNS
dc.subjectCREDIT
dc.subjectACCESSIBILITY
dc.subjectWORKING CAPITAL
dc.subjectCONTRACT
dc.subjectEXTERNAL FUNDS
dc.subjectFINANCIAL PERFORMANCE
dc.subjectENTERPRISE
dc.subjectPROPERTY
dc.subjectPRIVATE PARTIES
dc.subjectJOB CREATION
dc.subjectMINORITY SHAREHOLDER
dc.subjectSHARES
dc.subjectFINANCIAL ACCESS
dc.subjectMARKET
dc.subjectSTOCK MARKET DEVELOPMENT
dc.subjectMINORITY SHAREHOLDERS
dc.subjectFINANCIAL SERVICE
dc.subjectSECURITIES
dc.subjectSHAREHOLDERS
dc.subjectDEVELOPMENT OF BANKING
dc.subjectACCESS TO CREDIT
dc.subjectEXPROPRIATION
dc.subjectECONOMIC DEVELOPMENT
dc.subjectINTERESTS
dc.subjectFINANCING OBSTACLES
dc.subjectINVESTOR PROTECTIONS
dc.subjectINVESTOR
dc.subjectCORPORATE DEBT
dc.subjectGOODS
dc.subjectFIXED ASSETS
dc.subjectLEGAL SYSTEM
dc.subjectFINANCIAL DEVELOPMENT
dc.subjectDURABLE
dc.subjectEQUITY MARKETS
dc.subjectINVESTMENT
dc.subjectFINANCIAL INTERMEDIATION
dc.subjectLEGAL PROTECTION
dc.subjectFINANCIAL INTERMEDIARIES
dc.subjectSHARE
dc.subjectINVESTOR PROTECTION
dc.subjectCOLLATERAL
dc.subjectJUDICIAL SYSTEMS
dc.subjectINTERNAL FUNDS
dc.subjectSALES GROWTH
dc.subjectFINANCIAL MARKETS
dc.subjectFINANCIAL CAPACITY
dc.subjectFINANCIAL ASSETS
dc.subjectINSTITUTIONAL DEVELOPMENT
dc.subjectREINVESTMENT
dc.subjectEARNINGS
dc.subjectINVESTMENTS
dc.subjectLENDING
dc.subjectSHAREHOLDER
dc.subjectEXTERNAL FINANCING
dc.subjectINSTRUMENT
dc.subjectMICRO DATA
dc.subjectFINANCIAL SYSTEMS
dc.subjectLIABILITIES
dc.subjectPROPERTY RIGHTS PROTECTION
dc.subjectSTOCK MARKETS
dc.subjectPROTECTION OF MINORITY SHAREHOLDERS
dc.subjectFINANCIAL DEPTH
dc.subjectMICROENTERPRISES
dc.subjectDEBT MATURITY
dc.subjectEMPLOYEES
dc.titleUnbundling Institutions for External Financeen
dc.title.subtitleWorldwide Firm-Level Evidenceen
dc.typeWorking Paperen
dc.typeDocument de travailfr
dc.typeDocumento de trabajoes
dspace.entity.typePublication
okr.crossref.titleUnbundling Institutions for External Finance: Worldwide Firm-Level Evidence
okr.date.disclosure2015-06-02
okr.date.doiregistration2025-04-10T10:55:22.921974Z
okr.doctypePublications & Research
okr.doctypePublications & Research::Policy Research Working Paper
okr.docurlhttp://documents.worldbank.org/curated/en/2015/06/24578640/unbundling-institutions-external-finance-worldwide-firm-level-evidence
okr.globalpracticeFinance and Markets
okr.guid242421468191347288
okr.identifier.doi10.1596/1813-9450-7287
okr.identifier.externaldocumentum090224b082ee910e_1_0
okr.identifier.internaldocumentum24578640
okr.identifier.reportWPS7287
okr.language.supporteden
okr.pdfurlhttp://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2015/06/02/090224b082ee910e/1_0/Rendered/PDF/Unbundling0ins00firm0level0evidence.pdfen
okr.topicSocial Protections and Labor::Labor Policies
okr.topicFinance and Financial Sector Development::Debt Markets
okr.topicFinance and Financial Sector Development::Access to Finance
okr.topicPrivate Sector Development
okr.topicFinance and Financial Sector Development::Banks & Banking Reform
okr.unitFinance and Private Sector Development Team, Development Research Group
relation.isSeriesOfPublication26e071dc-b0bf-409c-b982-df2970295c87
relation.isSeriesOfPublication.latestForDiscovery26e071dc-b0bf-409c-b982-df2970295c87
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