Capital Market Financing and Firm Growth

Capital Market Financing and Firm Growth

This paper studies whether there is a connection between finance and growth at the firm level. It employs a new dataset of 150,165 equity and bond issuances around the world, matched with income and balance sheet data for 62,653 listed firms in 65...

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Main Authors: Didier, Tatiana, Levine, Ross, Llovet Montanes, Ruth, Schmukler, Sergio L.
Format: Working Paper
Language:English
Published: World Bank, Washington, DC 2020
Subjects:
BOND MARKET
CAPITAL MARKETS
CAPITAL RAISING
EQUITY MARKET
FINANCIAL STRUCTURE
FIRM DYNAMICS
FIRM FINANCING
FIRM SIZE
Online Access:http://documents.worldbank.org/curated/en/879651595862883790/Capital-Market-Financing-and-Firm-Growth
http://hdl.handle.net/10986/34255
id okr-10986-34255
recordtype oai_dc
spelling okr-10986-342552022-09-20T00:11:18Z Capital Market Financing and Firm Growth Didier, Tatiana Levine, Ross Llovet Montanes, Ruth Schmukler, Sergio L. BOND MARKET CAPITAL MARKETS CAPITAL RAISING EQUITY MARKET FINANCIAL STRUCTURE FIRM DYNAMICS FIRM FINANCING FIRM SIZE This paper studies whether there is a connection between finance and growth at the firm level. It employs a new dataset of 150,165 equity and bond issuances around the world, matched with income and balance sheet data for 62,653 listed firms in 65 countries over 1990-2016. Three main patterns emerge from the analyses. First, firms that choose to issue in capital markets use the funds raised to grow by enhancing their productive capabilities, increasing their tangible and intangible capital and the number of employees. Growth accelerates as firms raise funds. Second, the faster growth is more pronounced among firms that are more likely to face tighter financing constraints, namely, small, young, and high-R&D firms. Third, capital market issuances are associated with faster growth among firms located in countries with more developed capital markets relative to banks. Capital markets are also comparatively effective at allowing financially constrained firms to raise capital. 2020-07-30T15:34:25Z 2020-07-30T15:34:25Z 2020-07 Working Paper http://documents.worldbank.org/curated/en/879651595862883790/Capital-Market-Financing-and-Firm-Growth http://hdl.handle.net/10986/34255 English Policy Research Working Paper;No. 9337 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank World Bank, Washington, DC Publications & Research Publications & Research :: Policy Research Working Paper
repository_type Digital Repository
institution_category Foreign Institution
institution Digital Repositories
building World Bank Open Knowledge Repository
collection World Bank
language English
topic BOND MARKET
CAPITAL MARKETS
CAPITAL RAISING
EQUITY MARKET
FINANCIAL STRUCTURE
FIRM DYNAMICS
FIRM FINANCING
FIRM SIZE
spellingShingle BOND MARKET
CAPITAL MARKETS
CAPITAL RAISING
EQUITY MARKET
FINANCIAL STRUCTURE
FIRM DYNAMICS
FIRM FINANCING
FIRM SIZE
Didier, Tatiana
Levine, Ross
Llovet Montanes, Ruth
Schmukler, Sergio L.
Capital Market Financing and Firm Growth
relation Policy Research Working Paper;No. 9337
description This paper studies whether there is a connection between finance and growth at the firm level. It employs a new dataset of 150,165 equity and bond issuances around the world, matched with income and balance sheet data for 62,653 listed firms in 65 countries over 1990-2016. Three main patterns emerge from the analyses. First, firms that choose to issue in capital markets use the funds raised to grow by enhancing their productive capabilities, increasing their tangible and intangible capital and the number of employees. Growth accelerates as firms raise funds. Second, the faster growth is more pronounced among firms that are more likely to face tighter financing constraints, namely, small, young, and high-R&D firms. Third, capital market issuances are associated with faster growth among firms located in countries with more developed capital markets relative to banks. Capital markets are also comparatively effective at allowing financially constrained firms to raise capital.
format Working Paper
author Didier, Tatiana
Levine, Ross
Llovet Montanes, Ruth
Schmukler, Sergio L.
author_facet Didier, Tatiana
Levine, Ross
Llovet Montanes, Ruth
Schmukler, Sergio L.
author_sort Didier, Tatiana
title Capital Market Financing and Firm Growth
title_short Capital Market Financing and Firm Growth
title_full Capital Market Financing and Firm Growth
title_fullStr Capital Market Financing and Firm Growth
title_full_unstemmed Capital Market Financing and Firm Growth
title_sort capital market financing and firm growth
publisher World Bank, Washington, DC
publishDate 2020
url http://documents.worldbank.org/curated/en/879651595862883790/Capital-Market-Financing-and-Firm-Growth
http://hdl.handle.net/10986/34255
_version_ 1764480512913571840

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