Finance,Firm Size,and Growth |
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| Authors: | THORSTEN BECK ASLI DEMIRGUC‐KUNT LUC LAEVEN ROSS LEVINE |
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| Institution: | 1. Thorsten Beck is a Senior Economist, Development Research Group, World Bank (E‐mail: tbeck@worldbank.org).;2. Asli Demirguc‐Kunt is a Senior Research Manager, Development Research Group, World Bank (E‐mail: ademirguckunt@worldbank.org).;3. Luc Laeven is a Senior Economist, Research Department, International Monetary Fund, Centre for Economic Policy Research (CEPR), European Corporate Governance Institute (ECGI) (E‐mail: LLaeven@imf.org).;4. Ross Levine is the James and Merryl Tisch Professor of Economics, Department of Economics, Brown University, National Bureau of Economic Research (NBER) (E‐mail: Ross_Levine@brown.edu). |
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| Abstract: | Although research shows that financial development accelerates aggregate economic growth, economists have not resolved conflicting theoretical predictions and ongoing policy disputes about the cross‐firm distributional effects of financial development. Using cross‐industry, cross‐country data, the results are consistent with the view that financial development exerts a disproportionately positive effect on small firms. These results have implications for understanding the political economy of financial sector reform. |
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| Keywords: | G2 L11 L25 O1 firm size financial development economic growth |
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