NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Finance, Firm Size, and Growth

Thorsten Beck, Asli Demirguc-Kunt, Luc Laeven, Ross Levine

NBER Working Paper No. 10983
Issued in December 2004
NBER Program(s):   IFM

This paper examines whether financial development boosts the growth of small firms more than large firms and hence provides information on the mechanisms through which financial development fosters aggregate economic growth. We define an industry's technological firm size as the firm size implied by industry specific production technologies, including capital intensities and scale economies. Using cross-industry, cross-country data, the results indicate that financial development exerts a disproportionately large effect on the growth of industries that are technologically more dependent on small firms. This suggests that financial development accelerates economic growth by removing growth constraints on small firms and also implies that financial development has sectoral as well as aggregate growth ramifications.

download in pdf format
   (225 K)

email paper

This paper is available as PDF (225 K) or via email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w10983

Published: Thorsten Beck & Asli Demirguc-Kunt & Luc Laeven & Ross Levine, 2008. "Finance, Firm Size, and Growth," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 40(7), pages 1379-1405, October.

Users who downloaded this paper also downloaded these:
Kumar, Rajan, and Zingales w7208 What Determines Firm Size?
Beck, Demirguc-Kunt, and Levine w11224 SMEs, Growth, and Poverty
Levine w10766 Finance and Growth: Theory and Evidence
Beck, Demirguc-Kunt, and Levine w10979 Finance, Inequality, and Poverty: Cross-Country Evidence
Hall w1965 The Relationship Between Firm Size and Firm Growth in the U.S. Manufacturing Sector
 
Publications
Activities
Meetings
Data
People
About

Support
National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us