1 / 8

Determinants of Firm growth in Rwanda

Determinants of Firm growth in Rwanda. Student: Henry Karoro Supervisor: Lisa Chauvet. Outline. Reference Paper and Background Empirical Procedure and Results Contribution to Research. Reference Paper. Title: Financial And Legal Constraints To Growth: Does Firm Size Matter?

jui
Download Presentation

Determinants of Firm growth in Rwanda

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Determinants of Firm growth in Rwanda Student: Henry Karoro Supervisor: Lisa Chauvet

  2. Outline • Reference Paper and Background • Empirical Procedure and Results • Contribution to Research

  3. Reference Paper • Title: Financial And Legal Constraints To Growth: Does Firm Size Matter? • By: Thorsten Beck, AsliDemirguc-Kunt, and Vojislav Maksimovic • The Journal Of Finance Volume Lx, No. 1 February 2005

  4. Background • Market Imperfections hinder the ability of firms to make investment projects; • Effects of financial, legal and corruption on firms’ growth rates; • Firm-level survey database of 54 countries; • Investigates: - Effect of financial, legal, and corruption obstacles on firm growth; - Variation of this effect across firm size; -Comparison of size of firms across different levels of financial and institutional development; -Characteristics of the legal system that facilitate firm growth; -Impact of corruption in financial intermediaries (esp banks) on firm growth.

  5. Empirical Procedure • To investigate the main determinants of firm obstacles; • Obstacles =f(size*credit, size*laworder, size*corrupt, i.size) • To investigate the main determinants of firm growth; • growth=f(ownership, competition, sector, economy, obtacles)

  6. Results of the paper • Constraints (financial, legal underdevelopment and corruption) to the firm growth depend on firm size; Smallest firms are affected the most • Financial and institutional development reduces obstacles and here smaller firms that benefit the most • Corruption of bank officials is also key in the growth of firms; firms operating in areas with less corruption perform better

  7. Contribution to Research • Intend to use the WBES data of 2006 and 2011 • Concentrate on one African country Rwanda • Rwanda has made strides to improve on its business enviroment and as such it is ranked 32 in doing business in 2013 • What are the key variables that determine growth of firms in Rwanda? • With efforts to improve on the doing business has this improved on the growth of firms

  8. Growth will be considered as increase in firms sales • Financial obstacles will be proxied from the information on the constraints to obtain credit • Corruption information is also available from proxies in the raw data • Legal information on the courts is in the data • Include firm characteristics such as payments for security, age of the firm

More Related