Which Firms Benefit More from Financial Development?

Jan Bena and Stepan Jurajda

CERGE-EI Working Papers from The Center for Economic Research and Graduate Education - Economics Institute, Prague

Abstract: We exploit the substantial diversity in financial development of the 'single-market' EU- 15 economies to test whether more developed financial systems are better at tackling asymmetric information proxied by firm age and size. Comparing the growth effect of financial development across firms of different type, we find that financial development disproportionately fosters the growth of young—but not the youngest—companies, while there is relatively little evidence of differences in the effect across firms of different size.

Keywords: Financial development; corporate growth; information asymmetry. (search for similar items in EconPapers)
JEL-codes: F36 G15 G21 O16 O52 (search for similar items in EconPapers)
Date: 2007-06
References: View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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Working Paper: Which Firms Benefit More from Financial Development? (2007)
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