IDEAS home Printed from https://ideas.repec.org/a/oup/wbecrv/v10y1996i2p341-69.html
   My bibliography  Save this article

Stock Market Development and Financing Choices of Firms

Author

Listed:
  • Demirguc-Kunt, Ash
  • Maksimovic, Vojislav

Abstract

In many developing countries with emerging stock markets, banks are fearful of stock market development because they think that stock markets will reduce the volume of their business. This article empirically analyzes the effects of stock market development on firms' financing choices using data from thirty developing and industrial countries from 1980 to 1991. The results imply that initial improvements in the functioning of a developing stock market produce a higher debt-equity ratio for firms and thus more business for banks. In stock markets that are already developed, further development leads to a substitution of equity for debt financing. By contrast, in developing stock markets, large firms become more levered as the stock market develops, whereas small firms do not appear to be significantly affected by stock market development. Copyright 1996 by Oxford University Press.

Suggested Citation

  • Demirguc-Kunt, Ash & Maksimovic, Vojislav, 1996. "Stock Market Development and Financing Choices of Firms," World Bank Economic Review, World Bank Group, vol. 10(2), pages 341-369, May.
  • Handle: RePEc:oup:wbecrv:v:10:y:1996:i:2:p:341-69
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:oup:wbecrv:v:10:y:1996:i:2:p:341-69. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Oxford University Press) or (Christopher F. Baum). General contact details of provider: http://edirc.repec.org/data/wrldbus.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.