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Financial development, property rights, and growth

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  • Claessens, Stijn
  • Laeven, Luc

Abstract

The authors analyze how property rights affect the allocation of firms'available resources among different types of assets. In particular, they investigate empirically for a large number of countries whether firms in environments with more secure property rights allocate available resources more toward intangible assets and consequentially grow faster. The authors find that improved asset allocation due to better property rights has an effect on growth in sectoral value added equal to improved access to financing arising from greater financial development. The results are robust, using various samples and specifications, including controlling for growth opportunities.

Suggested Citation

  • Claessens, Stijn & Laeven, Luc, 2002. "Financial development, property rights, and growth," Policy Research Working Paper Series 2924, The World Bank.
    • Handle: RePEc:wbk:wbrwps:2924
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    References listed on IDEAS

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    More about this item

    Keywords

    Labor Policies; Economic Theory&Research; International Terrorism&Counterterrorism; Environmental Economics&Policies; Banks&Banking Reform; Environmental Economics&Policies; Economic Theory&Research; Banks&Banking Reform; Governance Indicators; Real&Intellectual Property Law;
    All these keywords.

    JEL classification:

    • G31 - Financial Economics - - Corporate Finance and Governance - - - Capital Budgeting; Fixed Investment and Inventory Studies
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • O34 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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