Research Papers Product year
  • Does Mobile Money Use Increase Firms' Investment? Evidence from Enterprise Surveys in Kenya, Uganda, and Tanzania

    Private investment can be an important engine of economic growth in East African countries, which, despite recent growth rates, are still plagued with adverse economic conditions. Against this backdrop, there has been substantial penetration of mobile money, moving beyond simple person-to-person exchanges toward adoption by private firms. This study explores whether there is a relationship between firm adoption of mobile money and firm investment. Using firm-level data that are nationally representative of the private sector in three East African countries.

  • The Effect of the Swedish Payroll Tax Cut for Youths on Firm Profitability

    Payroll taxes in Sweden were reduced substantially for people ages 26 years or younger on July 1, 2007. The objective of this tax cut was to lower youth unemployment. The question of how gains from payroll taxes are distributed between workers and owners of firms has been the focus of considerable theoretical and empirical attention. This paper examines the impact of the Swedish reform on firm profits using individual-level and firm-level microdata. Previous investigations into the effects of this particular reform have focused entirely on the effects on employment and wages, or have been limited to the retail sector. This paper finds that the reform was not associated with a general increase in firm profitability, but that there is some evidence of a positive effect on profits in the retail and wholesale sector.

  • What have we learned from the Enterprise Surveys regarding access to finance by SMEs?

    This paper uses a new measure to explore the availability of credit to SMEs in the developing world. SMEs are found to be more credit constrained and more likely to finance their working capital and investments through trade credit and informal sources of finance. Besides size, other firm characteristics are examined.

  • Benchmarking Financial Systems, Introducing the Financial Possibility Frontier

    Across the world, supply for financial services rarely matches the demand, given multiple market frictions. This paper discusses the concept of the financial possibilities frontier as a constrained optimum to categorize different problems of shallow financial markets or unsustainable expansion. The paper offers three examples of how to use different data sources to apply the frontier concept to assess the state of financial systems.

  • Obstacles to growth for small and medium enterprises in Turkey

    Many studies have shown that firm growth decreases monotonically with size and age. In this study, the authors investigate employment growth of firms in Turkey with an emphasis on small and medium size enterprises. In Turkey, small and medium size enterprises account for almost 77 percent of employment and play a crucial role in the economy.

  • Capital immobility and regional inequality: Evidence from India

    It shows that there are large regional differences in returns to factory investment, implying poor spatial capital mobility within India, which calls for financial markets reform.

  • Mexico: Who are the unbanked?

    We use nationally representative survey data from Mexico to compare households with savings accounts in formal financial institutions to their neighbors who do not have such accounts. The survey was conducted in 2005 and contains information on nearly 5000 households.

  • Financial development and innovation in small firms

    Firm-level data from a cross-section of 57 countries is used to study how financial development affects innovation in small firms. The author finds that relative to large firms in the same industry, R\&D spending by small firms is more likely and sizable in countries at higher levels of financial development.

  • Remittances and banking services: Evidence from Mexico

    Despite the rising volume of remittances flowing to developing countries, their impact on the development of banking services in recipient countries has been largely unexplored. We examine this topic using county-level data for Mexico on the fraction of households that receive remittances and measures of both banking breadth (e.g., branches or accounts per capita) and depth (e.g., deposits or credit to GDP).

  • When do creditor rights work?

    Creditor-friendly laws are generally associated with more credit to the private sector and deeper financial markets. But laws mean little if they are not upheld in the courts. The authors hypothesize that the effectiveness of creditor rights is strongly linked to the efficiency of contract enforcement. This hypothesis is tested using firm-level data on 27 European countries in 2002 and 2005.