Stock market development and firm financing choices

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Stock market development and firm financing choices, Volume 1

Author:	Demirguc-Kunt, Asli; Maksimovic, Vojislav;	Collection Title:	Policy Research working paper ; no. WPS 1461
Date Stored:	1995/05/01	Document Date:	1995/05/31
Document Type:	Policy Research Working Paper	Language:	English
Major Sector:	Finance	Report Number:	WPS1461
Sub Sectors:	Capital Markets Development	SubTopics:	Environmental Economics & Policies; International Terrorism & Counterterrorism; Economic Theory & Research; Payment Systems & Infrastructure; Housing Finance; Banks & Banking Reform; Financial Intermediation
Volume No:	1

Summary: The authors empirically analyze the association between firm financing choices and the level of development of financial markets in 30 countries for the period 1980-91. For the whole sample, there is a statistically significant negative correlation between stock market development, as measured by the ratio of market capitalization to gross domestic product, and the ratios of both long-term and short-term debt to firms' total equity. For developed markets in the sample, further stock market development leads to a substitution of equity for debt financing. In developing markets, by contrast, large firms become more leveraged as the stock market develops, whereas the smallest firms appear not to be significantly affected by market development.


Official Documents Official, scanned versions of documents (may include signatures, etc.)
File Type		Description	File Size (mb)

	PDF 48 pages	Official version*	3.36 (approx.)
	Text	Text version**


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File Type		Description	File Size (mb)

	PDF 48 pages	WPS1461	1.80

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