Cull, RobertXu, L. Colin2012-03-192012-03-192011-11-01https://hdl.handle.net/10986/3648This paper combines firm-level data from 89 countries with updated country-level data on financial structure, and uses two estimation approaches. It finds that in low-income countries, labor growth is swifter in countries with a higher level of private credit/gross domestic product; the positive effect of bank credit is especially pronounced in industries that depend heavily on external finance; and banking development is positively associated with more physical and human capital investment. These findings are consistent with predictions from new structural economics. In high-income countries, labor growth rates are increasing in the level of stock market capitalization, which is also consistent with predictions from new structural economics, although the analysis is unable to provide evidence that the association is causal. It finds no evidence that small-scale firms in low-income countries benefit most from private credit market development. Rather, the labor growth rates of larger, capital-intensive firms increase more with the level of private credit market development, a finding consistent with the history-based political economy view that banking systems in low-income countries serve the interests of the elite, rather than providing broad-based access to financial services.CC BY 3.0 IGOACCESS TO CREDITACCESS TO FINANCEACCESS TO FINANCIAL SERVICESACCOUNTINGACCOUNTING RECORDSADVANCED COUNTRIESADVERSE IMPACTAGRICULTUREBANK ASSETBANK CREDITBANK LENDINGBANK POLICYBANK REGULATIONBANKING CRISESBANKING SECTORBANKING SECTOR ASSETSBANKING SECTOR DEVELOPMENTBANKING SECTORSBANKING SYSTEMBANKING SYSTEMSBENCHMARKBRITISH LEGAL ORIGINBROKERBROKERSBUSINESS ENVIRONMENTBUSINESS ENVIRONMENTSCAPITAL EXPENDITURESCAPITAL FLOWSCAPITAL INTENSITYCAPITAL INVESTMENTCAPITAL INVESTMENTSCAPITAL MARKETSCASH FLOWCENTRAL BANKSCHECKSCIVIL LAWCOMMODITIESCOMMODITYCOMMON LAWCONSUMERSCORPORATE GOVERNANCECOUNTRY DUMMIESCOUNTRY FIXED EFFECTSCREDIT GROWTHCREDIT LEVELSCREDIT MARKETCREDIT MARKETSCREDITWORTHINESSDEBTSDEMOCRACYDEVELOPING COUNTRIESDEVELOPMENT POLICYDOMESTIC BANKINGDOMESTIC BANKING MARKETSDOMESTIC BANKSDUMMY VARIABLEDUMMY VARIABLESDURABLEECONOMIC DEVELOPMENTECONOMIC GROWTHECONOMIC HISTORIANSECONOMIC OPPORTUNITYECONOMIC RESEARCHECONOMICSECONOMIES OF SCALEEMPLOYEEEMPLOYMENTEMPLOYMENT GROWTHENDOWMENTSEQUIPMENTEXCLUSIONEXPENDITURESEXPROPRIATIONEXTERNAL FINANCEEXTERNAL FINANCINGFAMILY FARMSFINANCIAL DEVELOPMENTFINANCIAL HISTORIESFINANCIAL INSTITUTIONSFINANCIAL INTERMEDIARIESFINANCIAL INTERMEDIATIONFINANCIAL MARKETSFINANCIAL RESOURCESFINANCIAL SECTORFINANCIAL SECTOR DEVELOPMENTFINANCIAL SECTORSFINANCIAL SERVICESFINANCIAL STRUCTUREFINANCIAL STRUCTURESFINANCIAL SYSTEMFINANCIAL SYSTEMSFIRM GROWTHFIRM PERFORMANCEFOREIGN BANKFOREIGN BANK PARTICIPATIONFOREIGN BANKSFOREIGN ENTRYFOREIGN FIRMSFOREIGN OWNERSFOREIGN OWNERSHIPFOREIGN OWNERSHIP OF BANKSGDPGDP PER CAPITAGOVERNMENT OWNERSHIPGOVERNMENT OWNERSHIP OF BANKSGROWTH RATEGROWTH RATESHUMAN CAPITALINCOMEINCOME DISTRIBUTIONINCOME GROUPINCOME INEQUALITYINCOME LEVELINCOME LEVELSINCOMESINFORMATION ASYMMETRIESINFORMATION ASYMMETRYINSTITUTIONAL DEVELOPMENTINSTITUTIONAL ENVIRONMENTINSTRUMENTINTEREST RATESINTEREST RATES ON LOANSINTERNATIONAL BANKINTERNATIONAL CAPITALINTERNATIONAL CAPITAL FLOWSINVESTMENT CLIMATEINVESTMENT RATEINVESTMENT RATESINVESTOR PROTECTIONJUDICIAL SYSTEMKEY CHALLENGELEGAL PROTECTIONLEGAL SYSTEMLEGAL TRADITIONSLENDERSLESS DEVELOPED ECONOMIESLIABILITYLOCAL FINANCIAL INSTITUTIONSLOCAL INFRASTRUCTURELOW-INCOME COUNTRIESMARKET CAPMARKET DEVELOPMENTNATURAL RESOURCENATURAL RESOURCESNET EXPORTSOUTPUTOUTREACHOUTSIDE INVESTORSOWNERSHIP STRUCTUREPER CAPITA INCOMEPERFORMANCE MEASURESPOLITICAL CONSIDERATIONSPOLITICAL ECONOMYPOLITICAL STABILITYPORTFOLIOPORTFOLIO QUALITYPOSITIVE COEFFICIENTPOSITIVE COEFFICIENTSPOSITIVE EFFECTSPRIVATE CREDITPRIVATE MARKETPRIVATE PROPERTYPRIVATE SECTOR DEVELOPMENTPRODUCTIVITYPROFITABILITYPROPERTY RIGHTSPROPERTY RIGHTS PROTECTIONPRUDENTIAL REGULATIONREAL ESTATEREAL SECTORRESERVESRULE OF LAWSALES GROWTHSECURITIESSECURITIES MARKETSECURITIES MARKET DEVELOPMENTSECURITIES MARKETSSHARE OF ASSETSSMALL BANKSSMALL BUSINESSESSMALL-SCALE ENTREPRENEURSSOURCES OF FINANCESTATE BANKSSTOCK MARKETSTOCK MARKET CAPITALIZATIONSTOCK MARKET DEVELOPMENTSTOCK MARKETSTAXTELECOMMUNICATIONSTRANSPORTWEALTHWORLD ECONOMIESWorld Bank10.1596/1813-9450-5880