Micro and small enterprises (MSEs) in developing countries are typically considered to be severely credit constrained. Additionally, high business risks may partly explain why capital stocks of MSEs remain low. This article analyzes the determinants of capital stocks of MSEs in poor economies...

There is a well-known debate about the role of institutions in explaining the long-term development of countries. We believe there is value-added to consider the institutions hypothesis at the micro level within a country to analyze the exact transmission channels linking endogenous...