Market-Mobilized Capital

Omar Azfar and Thornton Matheson

Public Choice, 2003, vol. 117, issue 3-4, 357-72

Abstract: Theory suggests that capital is more likely to be efficiently allocated via market mechanisms, such as bank lending and stock issuance, than via non-market allocation. Consequently, we conjecture that increased market allocation of capital will enhance economic growth. We also posit that good collateral and corporate law will increase the allocation of capital via debt and equity markets, respectively. Using measures of statutory law as instruments for market-mobilized capital, to control for its endogeneity in a cross-country growth regression, we demonstrate a clear causal link between financial market development and economic performance. Copyright 2003 by Kluwer Academic Publishers

Date: 2003
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://journals.kluweronline.com/issn/0048-5829/contents link to full text (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:kap:pubcho:v:117:y:2003:i:3-4:p:357-72

Ordering information: This journal article can be ordered from
http://www.springer. ... ce/journal/11127/PS2

Access Statistics for this article

Public Choice is currently edited by WIlliam F. Shughart II

More articles in Public Choice from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().