Financial Development, Property Rights, and Growth

By Stijn Claessens, Luc Laeven. 2002

1,104 citations recorded by the source corpus.

In countries with more secure property rights, firms might allocate resources better and consequentially grow faster as the returns on different types of assets are more protected against competitors' actions. Using data on sectoral value added for a large number of countries, we find evidence consistent with better property rights leading to higher growth through improved asset allocation. Quantitatively, the growth effect is as large as that of improved access to financing due to greater financial development. Our results are robust using various samples and specifications, including controlling for growth opportunities.

Subfields: Accounting, Economics and Econometrics, Finance

View Paper: https://www.semanticscholar.org/paper/c21b373a71e5ed7304801a5c25a0bd37e5749fca

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Citations in the corpus

Adopting Better Corporate Governance: Evidence from Cross-Border Mergers (2008, neutral): “……rm's …nancing choices in Demirguc-Kunt and Maksimovic, (1998, 1999); the allocation of capital in Wurgler (2000), Beck and Levine (2002), and Claessens and Laeven (2003); the e¢ ciency of the markets in Morck et al. (2000); and even the severity of currency crises, in Johnson et al. (2000).”
Property Rights Protection and Access to Bank Loans: Evidence from Private Enterprises in China (2006, neutral): “3 There is a large literature on the importance of property rights protection for economic growth (Knack and Keefer, 1995; Mauro, 1995; Svensson, 1998; Acemoglu, Johnson and Robinson, 2001; Claessens and Laeven, 2003).”
The Value of Investor Protection: Firm Evidence from Cross-Border Mergers (2008, neutral): “2A good example is the World Bank reference to Claessens and Laeven (2003): “Improving corporate governance contributes to the development of the public and private capital markets” (in Lubrano, Mike, “Why Corporate Governance?””
Effects of national culture on earnings quality of banks (2011, neutral): “…in a country.9 Finally, we control for national economic development because a higher level of national economic development is associated with higher-quality institutions that facilitate private contracting (Claessens & Laeven, 2003), and hence potentially reduce the incentives to manage earnings.”
In the name of charity: Political connections and strategic corporate social responsibility in a transition economy (2015, background): “, 1998), which increases transaction costs in various forms including windfall taxes, restrictive financing, and barricaded market entries (Claessens and Laeven, 2003; Cull et al., 2014; Gwartney and Lawson, 2009).”
Access to Financial Services (2009, background): “Furthermore, greater ﬁnancial inclusion allows ﬁrms both the choice of more efﬁcient asset portfolios and a greater ability to innovate (Claessens and Laeven 2003; Ayyagari, Demirgu¨c¸-Kunt, and Maksimovic 2007a).”
Assessing Job Flows Across Countries: The Role of Industry, Firm Size and Regulations (2006, neutral): “, Classens and Laeven [2003]), in the analysis of firm dynamics (Klapper et al. [2006]) and in the analysis of output and employment growth as well as job flows (Micco and Pages [2006]).”
Foreign Aid and Market-Liberalizing Reform (2005, neutral): “Collier (1997) criticizes the IMF and other donors for insisting in some cases that aid recipients increase their tax revenues, often producing increases in trade taxes and other distortionary forms of mobilizing revenue in countries where the tax base is narrow and administrative capacity is weak.”