02696nam a2200337 a 4500 20181210070931.0 cr ||||||||||| 060113s2006 dcu sb i000 0 eng 2005705518 DLC DLC BD-DhBPA HG3881.5.W57 388.15 AYH 2006 Ayyagari, Meghana 107909 How important are financing constraints ? the role of finance in the business environment Meghana Ayyagari, Vojislav Maksimovic,Asli Demirguc-Kunt. Washington, D.C. : World Bank, 2006 59 p. ; 23 cm. Policy research working paper ; 3820 Title from PDF file as viewed on 1/13/2006. Includes bibliographical references. "What role does the business environment play in promoting and restraining firm growth? Recent literature points to a number of factors as obstacles to growth. Inefficient functioning of financial markets, inadequate security and enforcement of property rights, poor provision of infrastructure, inefficient regulation and taxation, and broader governance features such as corruption and macroeconomic stability are discussed without any comparative evidence on their ordering. In this paper, the authors use firm level survey data to present evidence on the relative importance of different features of the business environment. They find that although firms report many obstacles to growth, not all the obstacles are equally constraining. Some affect firm growth only indirectly through their influence on other obstacles, or not at all. Using Directed Acyclic Graph methodology as well as regressions, the authors find that only obstacles related to finance, crime, and political instability directly affect the growth rate of firms. Robustness tests further show that the finance result is the most robust of the three. These results have important policy implications for the priority of reform efforts. They show that maintaining political stability, keeping crime under control, and undertaking financial sector reforms to relax financing constraints are likely to be the most effective routes to promote firm growth. "--World Bank web site. Also available in print. System requirements: Adobe Acrobat Reader. Mode of access: World Wide Web. Zahid Business enterprises Finance Mathematical models. 108779 Maksimovic, Vojislav 107911 Demirguc-Kunt., Asli 104539 World Bank. 108780 Policy research working papers (Online) ; 3820. 108781 ddc BK 37861 37861 0 ddc 0 0 BPATC BPATC GRR 2018-05-13 0 388.15 AYH 2006 WB3892 2018-05-13 00:00:00 2018-05-13 BK Zahid