Using a unique survey database of 8265 firms from 25 transition economies, I find that lack of access to finance in general, and to bank credit in particular, is associated with significantly lower investment in on-the-job training. This effect is stronger in education-intensive industries and in industries facing good global growth opportunities. To address endogeneity issues, I use the structure of local credit markets as an instrument for credit constraints at the firm-level. In addition, in panel estimates, I control for the presence of unobserved firm-level heterogeneity, as well as for changes in macroeconomic conditions.

I use a panel of US manufacturing industries to test how venture capital (VC) affects the size distribution of business firms. The estimates suggest that an increase in the supply of VC affects positively mean firm size by increasing the relative share of medium-sized and larger firms. These results are robust to specifications that address the endogeneity in the supply of VC. The empirical evidence is consistent with the idea that VC promotes the “elitization” of firm entry.