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Creation of New Enterprises and Development of Existent Enterprises in East Asia and Latin America


  • Akio Hosono

    (Kobe University)


This paper intends to address the relationship between financial depth and development of private enterprises by classifying the growth of business activities into two parts: one part that is due to the creation of new firms and the other part, due to the expansion of existing firms. After examining the previous studies related to this issue, the paper compares East Asia and Latin America in terms of these two aspects of corporate growth and their relations to financial depth or financial development. It compares the evolution of financial depth and related indicators of East Asia and Latin America and analyzes their implications on new firms formation and expansion of existing enterprises. It finds that shallow financial depth in Latin America affects considerably development of private enterprises in the region, where economic growth and export is much less dynamic in comparison with East Asia.

Suggested Citation

  • Akio Hosono, 2003. "Creation of New Enterprises and Development of Existent Enterprises in East Asia and Latin America," Kobe Economic & Business Review, Research Institute for Economics & Business Administration, Kobe University, vol. 47, pages 23-66, February.
  • Handle: RePEc:kob:review:feb2003::v:47:p:5-22

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    Corporate finance; Financial systems; Labor relations; Japanese firms;

    JEL classification:

    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods


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