TY  - JOUR
AU  - Beck,Thorsten
AU  - Demirguc-Kunt,Asli
AU  - Laeven,Luc
AU  - Levine,Ross
TI  - Finance, Firm Size, and Growth
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 10983
PY  - 2004
Y2  - December 2004
UR  - http://www.nber.org/papers/w10983
L1  - http://www.nber.org/papers/w10983.pdf
N1  - Author contact info:
Thorsten Beck
The World Bank
1818 H Street N.W.
Mail Stop MC 3-307
Washington, D.C. 20433
E-Mail: tbeck@worldbank.org

Asli Demirguc-Kunt
The World Bank
1818 H Street
Washington, DC  20433
E-Mail: ademirguckunt@worldbank.org

Luc Laeven
Deputy Division Chief
International Monetary Fund
700 19th Avenue, NW
Washington, DC 20431
Tel: 202/623-9020
Fax: 202/623-4740
E-Mail: Llaeven@imf.org

Ross Levine
Haas School of Business
University of California at Berkeley
545 Student Services Building, #1900 (F685)
Berkeley, CA 94720-1900
Tel: 510-643-1419
E-Mail: Ross_levine@haas.berkeley.edu
AB  - 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.
ER  -