Financing of Firms in Developing Countries : Lessons from Research

This paper reviews and synthesizes theoretical and empirical research on the role of finance in developing countries. First, the paper presents the stylized facts about firms in developing nations as well as the legal, financial and broader institu...

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Bibliographic Details
Main Authors:	Ayyagari, Meghana, Demirguc-Kunt, Asli, Maksimovic, Vojislav
Format:	Policy Research Working Paper
Language:	English
Published:	World Bank, Washington, DC 2012
Subjects:	ACCESS TO BANK ACCESS TO EXTERNAL FINANCE ACCESS TO FINANCE ACCESS TO FINANCING ACCOUNTING ACCOUNTING STANDARDS AGENCY PROBLEM AGENCY PROBLEMS AGRICULTURAL CREDIT ALLOCATION OF CAPITAL ASYMMETRIC INFORMATION BALANCE SHEETS BANK ACCOUNT BANK ACCOUNTS BANK BRANCHES BANK CREDIT BANK FINANCING BANK LENDING BANKING SECTOR BANKING SYSTEM BINDING CONSTRAINT BUSINESS CYCLES CAPITAL ALLOCATION CAPITAL FLOWS CAPITAL MARKET CAPITAL MARKET DEVELOPMENT CAPITAL MARKETS CAPITAL MOBILITY CAPITAL STOCK CAPITAL STRUCTURE CAPITAL STRUCTURES CASH FLOWS CASH HOLDINGS CENTRAL BANK CENTRAL BANKS CIVIL LAW COMMON LAW CONTRACTUAL OBLIGATIONS CORPORATE BOND CORPORATE BOND MARKET CORPORATE FINANCE CORPORATE GOVERNANCE CREDIT BUREAUS CREDIT CARDS CREDIT MARKET CREDIT MARKETS CREDIT RATIONING CREDIT REGISTRIES CREDIT RISK CREDITOR CREDITOR RIGHTS CREDITORS CURRENCY DEBT DEBT FINANCING DEBT LEVELS DEBT MATURITY DEFAULT RATES DEPOSIT DEPOSIT MONEY BANKS DEVELOPING COUNTRIES DEVELOPING COUNTRY DEVELOPMENT FINANCE DISCLOSURE REQUIREMENTS DISTRIBUTION OF CREDIT ECONOMIC DEVELOPMENT ECONOMIC GROWTH EMERGING MARKETS EQUITY CAPITAL EQUITY MARKETS EXPENDITURES EXPROPRIATION EXPROPRIATION OF MINORITY SHAREHOLDERS EXTERNAL FINANCE EXTERNAL FUNDING EXTERNAL INVESTORS FINANCIAL ASSETS FINANCIAL CRISIS FINANCIAL DEVELOPMENT FINANCIAL DISTRESS FINANCIAL FRAGILITY FINANCIAL INSTITUTIONS FINANCIAL INSTRUMENTS FINANCIAL LIBERALIZATION FINANCIAL MARKET FINANCIAL MARKETS FINANCIAL SECTOR DEVELOPMENT FINANCIAL STRUCTURES FINANCIAL SYSTEM FINANCIAL SYSTEMS FINANCING OBSTACLES FIXED ASSETS FOREIGN BANK FOREIGN BANK ENTRY FOREIGN BANKS FOREIGN CAPITAL FOREIGN CURRENCY FOREIGN DIRECT INVESTMENT FUTURE CASH FLOW GLOBAL CAPITAL GLOBALIZATION GOVERNMENT BANKS GOVERNMENT INTERVENTION GOVERNMENT LENDING GOVERNMENT OWNERSHIP GOVERNMENT SUBSIDIES HOLDING INFLATION INFORMAL FINANCE INFORMATION ASYMMETRY INFORMATION SHARING INITIAL PUBLIC OFFERINGS INSTITUTIONAL DEVELOPMENT INSTRUMENT INSURANCE INTANGIBLE INTANGIBLE ASSETS INTEREST RATES INTERNATIONAL BANK INTERNATIONAL CAPITAL INTERNATIONAL FINANCE INTERNATIONAL MARKETS INVESTMENT FUNDS INVESTMENT OPPORTUNITIES INVESTMENT RATE INVESTMENT-CASH FLOW SENSITIVITIES INVESTOR INTEREST INVESTOR PROTECTION INVESTOR PROTECTIONS IPO ISSUANCE ISSUANCES JUDICIAL SYSTEM JUDICIAL SYSTEMS LABOR MARKET LEGAL ENVIRONMENT LEGAL ENVIRONMENTS LEGAL PROTECTION LEGAL RIGHTS LEGAL SYSTEM LEGAL SYSTEMS LEGAL TRADITION LEGAL TRADITIONS LENDERS LEVEL OF DEBT LINES OF CREDIT LIQUIDATION LIQUIDITY LOAN LOCAL FINANCE LONG TERM DEBT LONG-TERM DEBT MACROECONOMIC INSTABILITY MARKET ECONOMY MARKET FAILURE MARKET LIQUIDITY MARKET REGULATORS MARKET TURNOVER MARKET VALUE MATURITY STRUCTURES MICRO DATA MICRO-ENTERPRISES MICROENTERPRISES OUTSIDE INVESTORS OVERDRAFT FACILITY OWNERSHIP STRUCTURE OWNERSHIP STRUCTURES POLICY RESPONSES POLITICAL ECONOMY POLITICAL STABILITY PORTFOLIO PRIVATE BANKS PRIVATE CREDIT PRIVATE CREDIT BUREAUS PRIVATE INVESTORS PROPERTY RIGHTS PROPERTY RIGHTS PROTECTION PROPERTY RIGHTS PROTECTIONS PROTECTION OF INVESTOR PUBLIC BANKS PUBLIC CREDIT PUBLIC MARKETS PUBLIC REGISTRIES RATES OF RETURNS REGULATORY AUTHORITIES REINVESTMENT REPUDIATION RETURN RETURNS RISK OF EXPROPRIATION RULE OF LAW SECURITIES SECURITIES MARKETS SECURITY INTERESTS SEIZURES SETTLEMENT SHAREHOLDER SHAREHOLDERS SHORT-TERM DEBT SMALL BUSINESSES SMALL LOANS SOCIAL CAPITAL STATE BANKS STOCK MARKET STOCK MARKET CAPITALIZATION STOCK MARKET DEVELOPMENT STOCK MARKETS STOCK RETURNS TAX TRADE BALANCES TRADE CREDIT TRANSITION COUNTRIES TRANSPARENCY VALUATION VALUE OF COLLATERAL
Online Access:	http://documents.worldbank.org/curated/en/2012/04/16222792/financing-firms-developing-countries-lessons-research http://hdl.handle.net/10986/6038

Description
Summary:	This paper reviews and synthesizes theoretical and empirical research on the role of finance in developing countries. First, the paper presents the stylized facts about firms in developing nations as well as the legal, financial and broader institutional framework in which these firms operate. Next, the paper focuses on the financing choices available to small and medium firms in developing countries and highlights areas needing additional research.

Financing of Firms in Developing Countries : Lessons from Research

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