پویایی شرکت و توسعه مالی

Using comprehensive firm-level datasets, this paper studies the impact of cross-country variation in financial market development on firms' financing choices and growth. In less financially developed economies, small firms grow faster and have lower leverage than large firms. As financial development improves, the growth difference between small and large firms shrinks, while the leverage difference rises. The paper then develops a quantitative model where financial frictions drive firm growth and debt financing through the availability of credit and default risk. The model explains the observed cross-country variations in firm size, leverage and growth in response to changes in financial frictions.

Financial restrictions can hinder firms' ability to use inputs efficiently and affect firm growth. Recent theoretical models of firm dynamics predict that limited credit makes inefficiently small and young firms grow faster than large firms.1 However, evidence for the magnitude of these effects in actual firm-level data is scarce.2 The central goal of this paper is to use cross-country variation in financial market development to evaluate empirically and quantitatively the impact of financial frictions on firms' financing choices and growth rates with firm-level datasets.

Using a broad and comprehensive firm-level database from 27 European countries, this paper documents that small firms grow faster and use less debt financing than large firms. More importantly, as financial development improves, the growth rate of small firms decreases, but the leverage ratio of small firms increases, relative to large firms, especially for new entrant firms. Our empirical analysis provided a new picture of the relation of financial market development with debt financing and growth across firms and countries. The paper then developed a quantitative dynamic model of heterogeneous firms where financial development affects firm financing and growth through the availability of credit. Financial market development is important in accounting for the difference in growth rates and debt financing across firms and across countries.