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Financial development and the allocation of external finance
- 1.0389202 - NHU-C 2013 RIV NL eng J - Journal Article
Bena, J. - Ondko, Peter
Financial development and the allocation of external finance.
Journal of Empirical Finance. Roč. 19, č. 1 (2012), s. 1-25. ISSN 0927-5398. E-ISSN 1879-1727
R&D Projects: GA MŠMT LC542
Institutional support: PRVOUK-P23
Keywords : financial development * external finance * allocative efficiency
Subject RIV: AH - Economics
Impact factor: 0.934, year: 2012
We examine whether financial markets development facilitates the efficient allocation of resources. Using European micro-level data for 1996–2005, we show that firms in industries with growth opportunities use more external finance in financially more developed countries. This result is particularly strong for firms that are more likely to be financially constrained and dependent on domestic financial markets, such as small and young firms. Our findings are robust to controlling for technological determinants of external finance needs and to using different proxies for growth opportunities. Interestingly, the explanatory power of the measures of technological determinants identified in prior work decreases significantly once growth opportunities are controlled for.
Permanent Link: http://hdl.handle.net/11104/0218080
Number of the records: 1