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Institutions, Firm Financing and Growth


This paper reviews and synthesizes current knowledge on the role of institutions on firm financing and growth in developing countries. First, the paper presents stylized facts on the different institutional constraints under which firms in developing countries operate. Next, the paper focuses on firm size and age and how firm growth and financing patterns vary for small versus large firms and across firm life cycle in different institutional contexts. Finally the paper looks at the role of institutions versus initial starting characteristics of firms in predicting growth and productivity over the lifecycle and highlights areas needing additional research.


  • Asli Demigürç-Kunt
  • Meghana Ayyagari
  • Vojislav Maksimovic


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