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Journal of Banking & Finance Vol. 30 No. 11 2006

The influence of financial and legal institutions on firm size

Thorsten Beck1; Asli Demirgüç-Kunt; Vojislav Maksimovic2

1 World Bank · 2 Robert H. Smith School of Business at the University of Maryland, United States

Abstract

Theory does not predict an unambiguous relationship between a country’s financial and legal institutions and firm size. Using data on the largest industrial firms for 44 countries, we find that firm size is positively related to financial intermediary development, the efficiency of the legal system and property rights protection. We do not find any evidence that firms are larger in order to internalize the functions of the banking system or to compensate for the general inefficiency of the legal system.

DOI
10.1016/j.jbankfin.2006.05.006
Volume
30
Issue
11
Pages
2995-3015
Language
en
Sources
openalex crossref bibtex:phds-export.bib

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