Ownership structure and access to finance in developing countries. Issue 32 (9th July 2017)

• Record Type: Journal Article
• Authors: Mertzanis, Charilaos
• Is Part Of: Applied economics. Volume 49:Issue 32(2017)
• Page Start: 3195
• Page End: 3213
• Publication Date: 2017-07-09
• Subjects: Financing constraints -- investment models -- ownership structure -- developing countries; E22 -- G30 -- O16; Economics -- Periodicals; 330
• DOI: 10.1080/00036846.2016.1257106
• Languages: English
• ISSNs: 0003-6846

Abstract

ABSTRACT: Microsurvey data are used to explore the impact of ownership structure and other firm-specific characteristics on firms' access to finance in 136 developing countries. The analysis uses a consistent and large data set from the World Bank's Enterprise Surveys (ESs). The results show that ownership structure is a significant predictor of firms' access to finance but with qualifications. Specifically, private and foreign ownership are more robust predictors of firms financing constraints in developing countries, whilst government ownership and large owners appear significant in accordance with the controlling conditions and mostly in low-income countries. The predictive power and direction of firms' ownership structure is mitigated by both the specific characteristics of firms and the manner in which country-level factors affect the level of economic and financial activity in a country as well as the individual and social behaviour towards financial contracting.