Which Firms Benefit More from Financial Development?

Stepan Jurajda and Jan Bena

No 6392, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: We 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 (FD) across firms of different type, we find that FD disproportionately fosters the growth of young companies, while there is relatively little evidence of differences in the effect across firms of different size. The disproportionate gains from FD for youngest firms are concentrated among firms with lower shares of equity capital on total assets as these firms are in more need of external financing.

Keywords: Corporate growth; Financial development; Information asymmetry (search for similar items in EconPapers)
JEL-codes: F36 G15 G21 O16 O52 (search for similar items in EconPapers)
Date: 2007-07
New Economics Papers: this item is included in nep-bec and nep-cfn
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Citations: View citations in EconPapers (6)

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