nep-fdg New Economics Papers
on Financial Development and Growth
Issue of 2007‒09‒30
one paper chosen by
Iulia Igescu
Global Insight, GmbH

  1. Financial Development and Growth in Direct Firm-Level Comparisons By Jan Bena,; Stepan Jurajda

  1. By: Jan Bena,; Stepan Jurajda
    Abstract: The establishment of the EU-15 'single market' in 1993 brought about a high degree of synchronization of industry shocks, while substantial diversity existed in the development of country-level financial markets. We compare within-industry growth rates of similar 'single-market' firms facing financial systems of different depth and institutional quality as of 1993. Moving from the least to the most developed financial market within the EU- 15 boosts firms' annual value-added growth by about three percentage points. Our results also suggest that the growth gap due to initially under-developed financial systems was closed by 2003.
    Keywords: Financial development, Corporate growth, Access to financial markets.
    JEL: F36 G15 G21 O16 O52
    Date: 2007–03

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