This study conducts an empirical investigation of the effects of access to finance on the growth of firms in African countries. In order to achieve this, we made use of a new rich enterprise-level data set from the World Bank's Enterprise Surveys and employ both subjective and objective measures...

This paper proposes an estimator for the endogenous switching regression models with fixed effects. The estimator allows for endogenous selection and for conditional heteroscedasticity in the outcome equation. Applying the estimator to a dataset on the productivity in agriculture substantially...

Firm surveys often indicate that firms complain a lot about lack of access to financial services, but financing constraints are difficult to identify, given demand and supply considerations and with only surveys based on firms' perceptions. Specifically, it is difficult to separate demand for...

We propose a structural model of a financial institution that can invest in both liquid and illiquid assets. The goal of this firm is to maximize the profit of its shareholders, while satisfying some capital requirement and liquidity constraint. Using stochastic control techniques, we derive the...

We show that a simple, intuitive variable, GVD (Goliath versus David) reflects time-variation in discount rates related to changes in aggregate business conditions. GVD is the annual change in the weight of the largest 250 firms in the aggregate stock market, and is motivated by research that...

In this paper, we develop a structural model that captures the interaction between the cash balance and investment opportunities for a rm that already has some debt outstanding. We consider a rm whose assets produce a stochastic cash flow stream. The fi rm has an opportunity to expand its...

Many developing countries are unable to provide their industrial sector with reliable power and many enterprises have to contend with electricity that is insufficient and of poor quality. Because of these constraints, firms in developing countries opt for self-generation even though it is widely...

Adverse shocks to rich countries often have a large and persistent negative impact on investment and output in developing countries. This paper examines a transmission mechanism that can account for this stylized fact. The mechanism is based on the existence of international financial frictions....