Abstract

http://ssrn.com/abstract=2185146
 
 

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The Historical Roots of Firm Access to Finance: Evidence from the African Slave Trade


Lamar Pierce


Washington University, Saint Louis - John M. Olin School of Business

Jason Snyder


University of California, Los Angeles (UCLA) - Anderson School of Management

May 1, 2013


Abstract:     
This paper shows that access to finance is the crucial factor in explaining the link between the historical African slave trade and current GDP. We show: (1) The slave trade is strongly linked to current firm access to finance; (2) Among all the business obstacles a firm faces, the slave trade affects only access to finance; and (3) The slave trade erodes access to both formal credit and the trade credit thought to be its substitute. The results suggest a causal link between culture and finance that helps explain the pivotal role of both trust and finance in economic development.

Number of Pages in PDF File: 46

Keywords: Trust, Social Capital, Finance, Africa, Growth, Development

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Date posted: December 5, 2012 ; Last revised: May 5, 2013

Suggested Citation

Pierce, Lamar and Snyder, Jason, The Historical Roots of Firm Access to Finance: Evidence from the African Slave Trade (May 1, 2013). Available at SSRN: http://ssrn.com/abstract=2185146 or http://dx.doi.org/10.2139/ssrn.2185146

Contact Information

Lamar Pierce (Contact Author)
Washington University, Saint Louis - John M. Olin School of Business ( email )
One Brookings Drive
Campus Box 1133
St. Louis, MO 63130-4899
United States
314-935-5205 (Phone)
Jason Snyder
University of California, Los Angeles (UCLA) - Anderson School of Management ( email )
110 Westwood Plaza
Los Angeles, CA 90095-1481
United States
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