Job growth and finance : are some financial institutions better suited to early stages of development than others?
This paper combines firm-level data from 89 countries with updated country-level data on financial structure, and uses two estimation approaches. It finds that in low-income countries, labor growth is swifter in countries with a higher level of private credit/gross domestic product; the positive effect of bank credit is especially pronounced in industries that depend heavily on external finance; and banking development is positively associated with more physical and human capital investment. These findings are consistent with predictions from new structural economics. In high-income countries, labor growth rates are increasing in the level of stock market capitalization, which is also consistent with predictions from new structural economics, although the analysis is unable to provide evidence that the association is causal. It finds no evidence that small-scale firms in low-income countries benefit most from private credit market development. Rather, the labor growth rates of larger, capital-intensive firms increase more with the level of private credit market development, a finding consistent with the history-based political economy view that banking systems in low-income countries serve the interests of the elite, rather than providing broad-based access to financial services.
|Date of creation:||01 Nov 2011|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: (202) 477-1234
Web page: http://www.worldbank.org/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Baqir, Reza & Easterly, William & Alesina, Alberto, 1999.
"Public Goods and Ethnic Divisions,"
4551797, Harvard University Department of Economics.
- Alesina, Alberto & Baqir, Reza & Easterly, William, 1999. "Public goods and ethnic divisions," Policy Research Working Paper Series 2108, The World Bank.
- Alberto Alesina & Reza Baqir & William Easterly, 1997. "Public Goods and Ethnic Divisions," NBER Working Papers 6009, National Bureau of Economic Research, Inc.
- repec:dgr:kubcen:2011017 is not listed on IDEAS
- repec:ner:tilbur:urn:nbn:nl:ui:12-3125519 is not listed on IDEAS
- Alejandro Micco & Ugo Panizza & Monica Yañez, 2005.
"Bank Ownership and Performance Does Politics Matter?,"
Working Papers Central Bank of Chile
356, Central Bank of Chile.
- Micco, Alejandro & Panizza, Ugo & Yanez, Monica, 2007. "Bank ownership and performance. Does politics matter?," Journal of Banking & Finance, Elsevier, vol. 31(1), pages 219-241, January.
- Micco, Alejandro & Panizza, Ugo & YaÃƒÂƒÃ‚Â±ez, Monica, 2006. "Bank Ownership and Performance Does Politics Matter?," POLIS Working Papers 62, Institute of Public Policy and Public Choice - POLIS.
- William F. Maloney & Daniel Lederman, 2008.
"In search of the Missing Resource Curse,"
JOURNAL OF LACEA ECONOMIA,
LACEA - LATIN AMERICAN AND CARIBBEAN ECONOMIC ASSOCIATION.
- Claessens, Stijn & van Horen, Neeltje, 2012.
"Being a foreigner among domestic banks: Asset or liability?,"
Journal of Banking & Finance,
Elsevier, vol. 36(5), pages 1276-1290.
- Neeltje van Horen & Stijn Claessens, 2009. "Being a Foreigner Among Domestic Banks: Asset or Liability?," IMF Working Papers 09/273, International Monetary Fund.
- Stijn Claessens & Neeltje van Horen, 2009. "Being a Foreigner among Domestic Banks: Asset or Liability?," DNB Working Papers 224, Netherlands Central Bank, Research Department.
- Claessens, Stijn & van Horen, Neeltje, 2009. "Being a foreigner among domestic banks: Asset or liability?," MPRA Paper 13467, University Library of Munich, Germany.
- repec:ner:tilbur:urn:nbn:nl:ui:12-3125518 is not listed on IDEAS
- Claessens, Stijn & Demirguc-Kunt, Asl[iota] & Huizinga, Harry, 2001. "How does foreign entry affect domestic banking markets?," Journal of Banking & Finance, Elsevier, vol. 25(5), pages 891-911, May.
- Zephyr, 2010. "The city," City, Taylor & Francis Journals, vol. 14(1-2), pages 154-155, February.
- repec:cup:cbooks:9780521553520 is not listed on IDEAS
- repec:oup:wbrobs:v:26:y:2010:i:2:p:310-340 is not listed on IDEAS
When requesting a correction, please mention this item's handle: RePEc:wbk:wbrwps:5880. 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: (Roula I. Yazigi)
If references are entirely missing, you can add them using this form.