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Law and Firms' Access to Finance

  • Thorsten Beck
  • Asli Demirguc-Kunt
  • Ross Levine

This paper contributes to the literature on how a country's legal origin influences the operation of its financial system by using firm-level survey data on the obstacles that firms face in raising external finance. The paper assesses two channels through which legal origin may influence the financial system. It finds that the adaptability of a country's legal system is more important for explaining the obstacles that firms face in accessing external finance than the political independence of the judiciary.

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File URL: http://www.nber.org/papers/w10687.pdf
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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 10687.

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Date of creation: Aug 2004
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Publication status: published as Thorsten Beck & Asli Demirguc-Kunt, 2005. "Law and Firms' Access to Finance," American Law and Economics Review, Oxford University Press, vol. 7(1), pages 211-252.
Handle: RePEc:nbr:nberwo:10687
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