Capital structures in developing countries

Article Abstract:

This article analyzes capital structure choices for firms in developing countries to determine if capital structure theory is applicable in countries with different institutional structures. Results imply that decisions are affected by the same variables, but certain differences exist indicating specific factors in each country.

World, Statistical Data Included, Management, Economic policy, Developing countries, Economic development, Capital

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Financial and legal constraints to growth: does firm size matter?

Article Abstract:

The impact of efficient financial and legal systems on growth of small and medium enterprises is examined.

United States, Product quality, Financial Corporations, Quality management, Justice, Administration of, Administration of justice, Financial institutions, Growth, Industry growth, Company growth, Small and medium sized companies, Organizational structure

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Law, finance, and firm growth

Article Abstract:

We investigate how differences in legal and financial systems affect firms' use of external financing to fund growth. We show that in countries whose legal systems score high on an efficiency index, a greater proportion of firms use long-term external financing. An active, though not necessarily large, stock market and a large banking sector are also associated with externally financed firm growth. The increased reliance on external financing occurs in part because established firms in countries with well-functioning institutions have lower profit rates. Government subsidies to industry do not increase the proportion of firms relying on external financing. (Reprinted by permission of the publisher.)

Research, Corporate counsel, Financial management, Long-term financing, Long term financing

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