Language:
English
Pages:
Online-Ressource
Edition:
Online-Ausg. World Bank E-Library Archive Also available in print
Series Statement:
Policy research working paper 3797
Parallel Title:
Knill, April M Taking the bad with the good
Keywords:
Investments, Foreign
;
Portfolio management
;
Small business Finance
;
Investments, Foreign
;
Portfolio management
;
Small business Finance
Abstract:
"The author examines the impact of the volatility of foreign portfolio investment on the financial constraints of small firms. Using a dataset of over 195,000 firm-year observations across 53 countries, she examines the impact of foreign portfolio investment instability on capital issuance and firm growth across countries and firm characteristics, in particular size. After controlling for the endogeneity of foreign portfolio investment instability, as well as for firm-, industry-, and country-level characteristics such as GDP growth, as well as the levels of foreign portfolio and direct investment, the author finds that the volatility of foreign portfolio investment is only significantly associated with a decreased ability to issue publicly-traded securities for small firms in years when nations are considered less "creditworthy." The volatility of foreign portfolio investment only hinders the growth of small firms significantly in periods when nations are deemed less "creditworthy." These results underscore both the significance of a good financial system that minimizes capital flow volatility, as well as the influence of property rights and country creditworthiness to instill confidence in foreign investors. "--World Bank web site
Note:
Includes bibliographical references
,
Title from PDF file as viewed on 12/15/2005
,
Also available in print.
URL:
Volltext
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