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Author: Mr.Maria Soledad Martinez Peria
Publisher: International Monetary Fund
ISBN: 1475595751
Category : Business & Economics
Languages : en
Pages : 28
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Book Description
This short paper reviews recent literature on the use of long-term finance in developing economies (relative to advanced ones) to identify where long-term financing occurs, and what role different financial intermediaries and markets play in extending this type of financing. Although banks are the most important providers of credit, they do not seem to offer long-term financing. Capital markets have grown since the 1990s and can provide financing at fairly long terms. But few firms use these markets. Only some institutional investors provide funding at long-term maturities. Governments might help to expand long-term financing, although with limited policy tools.
Author: Mr.Maria Soledad Martinez Peria
Publisher: International Monetary Fund
ISBN: 1475595751
Category : Business & Economics
Languages : en
Pages : 28
Get Book Here
Book Description
This short paper reviews recent literature on the use of long-term finance in developing economies (relative to advanced ones) to identify where long-term financing occurs, and what role different financial intermediaries and markets play in extending this type of financing. Although banks are the most important providers of credit, they do not seem to offer long-term financing. Capital markets have grown since the 1990s and can provide financing at fairly long terms. But few firms use these markets. Only some institutional investors provide funding at long-term maturities. Governments might help to expand long-term financing, although with limited policy tools.
Author: Gerard Caprio
Publisher:
ISBN:
Category :
Languages : en
Pages : 31
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Book Description
It appears that firms grow faster and are more productive when more long-term finance is available to them. Government subsidies do not produce the same effects and are in some cases associated with reduced productivity and growth.Caprio and Demirguc-Kunt review the literature on term finance to place the research in context and discuss its implications for World Bank operations. Their project investigated whether industrial firms in developing countries suffer from a shortage of long-term credit and whether that shortage affects the firm's investment, productivity, and growth.Both issues are important in designing the World Bank's industrial lending policy because the development community is reevaluating mechanisms to make more term finance available or to lessen the constraints imposed by its absence.Using both cross-country empirical analysis and country case studies, researchers found that developing country firms use significantly less long-term debt than their industrial country counterparts, even after controlling for firm characteristics. They explain the difference in debt composition of industrial and developing countries in terms of firm characteristics, macro factors, and - most important - government subsidies, the country's level of financial development, and legal and institutional factors.They conclude that more long-term finance tends to be associated with higher productivity.Cross-country analysis of firm-level data also indicates that when there is an active stock market and when creditors and debtors are better able to enter into long-term contracts, firms seem to be able to grow faster than they could by relying only on internal resources and short-term credit.Another important finding: Government subsidies around the world have increased firms' long-term indebtedness, but there is no evidence connecting these subsidies with the firms' ability to grow faster. Indeed, in some cases subsidies were associated with lower productivity.This paper - a product of the Finance and Private Sector Development Division, Policy Research Department - summarizes the results of a recently completed Bank project on term finance. The study was funded by the Bank's Research Support Budget under the research project Term Finance: Theory and Evidence (RPO 679-62).
Author: Gerard Caprio
Publisher: World Bank Publications
ISBN:
Category : Crecimiento economico
Languages : en
Pages : 38
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Book Description
Author: Gerard Caprio
Publisher:
ISBN:
Category : Electronic books
Languages : en
Pages :
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Book Description
(April 1997) It appears that firms grow faster and are more productive when more long-term finance is available to them. Government subsidies do not produce the same effects and are in some cases associated with reduced productivity and growth. Caprio and Demirgüç-Kunt review the literature on term finance to place the research in context and discuss its implications for World Bank operations. Their project investigated whether industrial firms in developing countries suffer from a shortage of long-term credit and whether that shortage affects the firm's investment, productivity, and growth. Both issues are important in designing the World Bank's industrial lending policy because the development community is reevaluating mechanisms to make more term finance available or to lessen the constraints imposed by its absence. Using both cross-country empirical analysis and country case studies, researchers found that developing country firms use significantly less long-term debt than their industrial country counterparts, even after controlling for firm characteristics. They explain the difference in debt composition of industrial and developing countries in terms of firm characteristics, macro factors, and - most important - government subsidies, the country's level of financial development, and legal and institutional factors. They conclude that more long-term finance tends to be associated with higher productivity. Cross-country analysis of firm-level data also indicates that when there is an active stock market and when creditors and debtors are better able to enter into long-term contracts, firms seem to be able to grow faster than they could by relying only on internal resources and short-term credit. Another important finding: Government subsidies around the world have increased firms' long-term indebtedness, but there is no evidence connecting these subsidies with the firms' ability to grow faster. Indeed, in some cases subsidies were associated with lower productivity. This paper - a product of the Finance and Private Sector Development Division, Policy Research Department - summarizes the results of a recently completed Bank project on term finance. The study was funded by the Bank's Research Support Budget under the research project Term Finance: Theory and Evidence (RPO 679-62).
Author: The World Bank
Publisher: World Bank Publications
ISBN: 1464804710
Category : Business & Economics
Languages : en
Pages : 211
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Book Description
Global Financial Development Report 2015/2016 focuses on the ability of financial systems to sustainably extend the maturity of financial contracts for private agents. The challenges of extending the maturity structure of finance are often considered to be at the core of effective, sustainable financial development. Sustainably extending long-term finance may contribute to the objectives of higher growth and welfare, shared prosperity and stability in two ways: by reducing rollover risks for borrowers, thereby lengthening the horizon of investments; and by increasing the availability of long-term financial instruments, thereby allowing households to address their lifecycle challenges. The aim of the report is to contribute to the global policy debate on long-term finance. It builds upon findings from recent and ongoing research, lessons from operational work, as well as on inputs from financial sector professionals and researchers both within and outside the World Bank Group. Benefitting from new worldwide datasets and information on financial development, it will provide a broad and balanced review of the evidence and distill pragmatic lessons on long-term finance and related policies. This report, the third in the Global Financial Development Report series, follows the second issue on Financial Inclusion and the inaugural issue, Rethinking the Role of the State in Finance. The Global Financial Development Report 2015/2016 will be accompanied by a website worldbank.org/financialdevelopment containing extensive datasets, research papers, and other background materials as well as interactive features.
Author: Hilary Devine
Publisher: International Monetary Fund
ISBN: 1513571567
Category : Business & Economics
Languages : en
Pages : 161
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Book Description
The Covid-19 pandemic has aggravated the tension between large development needs in infrastructure and scarce public resources. To alleviate this tension and promote a strong and job-rich recovery from the crisis, Africa needs to mobilize more financing from and to the private sector.
Author: OECD
Publisher: OECD Publishing
ISBN: 9264652434
Category :
Languages : en
Pages : 178
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Book Description
The Global Outlook on Financing for Sustainable Development 2021 calls for collective action to address both the short-term collapse in resources of developing countries as well as long-term strategies to build back better following the outbreak of the COVID-19 pandemic.
Author: Asli Demirguc-Kunt
Publisher: World Bank Publications
ISBN:
Category : Access to Finance
Languages : en
Pages : 82
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Book Description
Abstract: The first part of this paper reviews the literature on the relation between finance and growth. The second part of the paper reviews the literature on the historical and policy determinants of financial development. Governments play a central role in shaping the operation of financial systems and the degree to which large segments of the financial system have access to financial services. The paper discusses the relationship between financial sector policies and economic development.
Author: Richard L. Kitchen
Publisher:
ISBN:
Category : Business & Economics
Languages : en
Pages : 392
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Book Description
The main theme of this book is the financing of economic development - the mobilization of finance and its current use. The book covers both domestic and international finance. It is both theoretical and empirical and contains historical perspectives and an analysis of current problems.
Author: Mr.Kangni Kpodar
Publisher: International Monetary Fund
ISBN: 1455200743
Category : Business & Economics
Languages : en
Pages : 34
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Book Description
This paper studies the link between financial development and economic growth in the West African Economic and Monetary Union (WAEMU). Using panel data for WAEMU countries over the period 1995-2006, the results suggest that while financial development does support growth in the region, long-term bank financing has a greater impact on economic growth than short-term financing because long-term projects have higher returns adjusted for risks. Given that in the WAEMU short-term credit accounts for about 70 percent of credit to the private sector, WAEMU countries are less able to reap the full benefits of improvements in their financial systems. The results also highlight the importance of macroeconomic stability, a creditor-friendly environment, political stability, and the availability of long-term financial resources in fostering banks’ supply of long-term loans.
