Financial Development and Corporate Growth in the EU Single Market

28 Pages Posted: 8 Jun 2011

See all articles by Jan Bena

Jan Bena

University of British Columbia - Sauder School of Business

Stepan Jurajda

affiliation not provided to SSRN

Date Written: July 2011

Abstract

The establishment of the EU‐15 ‘single market’ in 1993 brought about a high degree of similarity in firms' growth opportunities across countries, while substantial diversity existed in the development of national financial markets. We compare within‐industry growth rates of similar ‘single market’ firms facing financial systems of different depth and institutional quality as of 1993. Moving from the least to the most developed financial market within the EU‐15 boosts firms' annual value‐added growth by about three percentage points. Our results also suggest that the growth gap due to initially underdeveloped financial systems was closed by 2003.

Suggested Citation

Bena, Jan and Jurajda, Stepan, Financial Development and Corporate Growth in the EU Single Market (July 2011). Economica, Vol. 78, Issue 311, pp. 401-428, 2011, Available at SSRN: https://ssrn.com/abstract=1859853 or http://dx.doi.org/10.1111/j.1468-0335.2009.00822.x

Jan Bena

University of British Columbia - Sauder School of Business ( email )

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Stepan Jurajda

affiliation not provided to SSRN

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