Firm Financing and Growth in the Arab Region

41 Pages Posted: 20 Jul 2016 Last revised: 27 Apr 2018

Date Written: July 20, 2016


This paper documents how firms in Arab countries issue equity, corporate bonds, and syndicated loans in domestic and international markets to obtain financing and grow. Using a new data set on issuance activity and firm performance, the paper finds that capital raising through these markets has grown rapidly since the early 1990s and involved an increasing number of issuing firms. Whereas the amounts raised (relative to gross domestic product) in equity and loan markets stand well with respect to international standards, bond issuance activity lags behind. Yet, bond financing has gained importance over time. Equity issuances primarily take place domestically, while bonds and loans are mostly issued internationally, display long maturities, and entail low levels of credit risk. Issuing firms are larger, grow faster, and are more leveraged than non-issuers. While issuers tend to be larger ex ante than non-issuers, the size gap between them seems to widen over time.

Keywords: Industrial Economics, Economic Growth, Economic Theory & Research, Securities Markets Policy & Regulation, Capital Flows, Capital Markets and Capital Flows, International Trade and Trade Rules, Energy Demand, Energy and Mining, Energy and Environment

Suggested Citation

Cortina Lorente, Juan Jose and Ismail, Soha Ismail Ahmed Aly and Schmukler, Sergio, Firm Financing and Growth in the Arab Region (July 20, 2016). World Bank Policy Research Working Paper No. 7756. Available at SSRN:

Juan Jose Cortina Lorente (Contact Author)

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

Soha Ismail Ahmed Aly Ismail

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

Sergio Schmukler

World Bank - Development Research Group (DECRG) ( email )

1818 H. Street, N.W.
MSN MC 3-301
Washington, DC 20433
United States
202-458-4167 (Phone)
202-522-3518 (Fax)


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