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Financial development and the allocation of external finance
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SYSNO ASEP 0389202 Document Type J - Journal Article R&D Document Type Journal Article Subsidiary J Článek ve WOS Title Financial development and the allocation of external finance Author(s) Bena, J. (CZ)
Ondko, Peter (NHU-C)Source Title Journal of Empirical Finance . - : Elsevier - ISSN 0927-5398
Roč. 19, č. 1 (2012), s. 1-25Number of pages 25 s. Language eng - English Country NL - Netherlands Keywords financial development ; external finance ; allocative efficiency Subject RIV AH - Economics R&D Projects LC542 GA MŠMT - Ministry of Education, Youth and Sports (MEYS) Institutional support NHU-C - PRVOUK-P23 UT WOS 000300073500001 DOI 10.1016/j.jempfin.2011.11.002 Annotation 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. Workplace Economics Institute - CERGE Contact Tomáš Pavela, pavela@cerge-ei.cz, Tel.: 224 005 122 Year of Publishing 2013
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