Capital Market Financing, Firm Growth, and Firm Size Distribution

Tatiana Didier (), Ross Levine () and Sergio Schmukler

No 172015, Working Papers from Hong Kong Institute for Monetary Research

Abstract: How many and which firms issue equity and bonds in domestic and international markets, how do these firms grow relative to non-issuing firms, and how does firm performance vary along the firm size distribution (FSD)? To evaluate these questions, we construct a new dataset by matching data on firm-level capital raising activity with balance sheet data for 45,527 listed firms in 51 countries. Three main patterns emerge from the analysis. (1) Only a few large firms issue equity or bonds, and among them a small subset has raised a large proportion of the funds raised during the 1990s and 2000s. (2) Issuers grow faster than non-issuers in terms of assets, sales, and employment, that is, firms do not simply use securities markets to adjust their financial accounts. (3) The FSD of issuers evolves differently from that of non-issuers, tightening among issuers and widening among non-issuers.

Keywords: Access to Finance; Bond Markets; Capital Market Development; Capital Raisings; Firm Dynamics; Firm Financing; Stock Markets (search for similar items in EconPapers)
JEL-codes: F65 G00 G10 G31 G32 L25 (search for similar items in EconPapers)
Pages: 48 pages
Date: 2015-08
New Economics Papers: this item is included in nep-bec, nep-cse, nep-ent and nep-sbm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (13)

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Related works:
Working Paper: Capital market financing, firm growth, and firm size distribution (2016)
Working Paper: Capital market financing, firm growth, and firm size distribution (2015)
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