Legal effectiveness and external capital
Subtitle: the role of foreign debt
By: George Allayannis, Gregory W. Brown, Leora F. Klapper.
Contributors: Brown, Gregory W.; World Bank.
Series: Policy research working paper ;; 3530; Policy research working papers (Online) ;; 3530.
Publisher: World Bank
Published: 2005
Place of publication: [Washington, D.C
Language: eng
Format: Electronic resource
Subjects: Debts, External -- East Asia.; Loans, Foreign -- East Asia.; Industries -- East Asia.; Law -- East Asia.
Description: "Previous research has documented weak, and sometimes conflicting, effects of legal quality on measures of firm debt.  Using WorldScope data for 1,689 firms, as well as more detailed proprietary data for 315 firms across nine East Asian countries, the authors find that access to foreign financing appears to loosen borrowing constraints associated with poor legal systems.  This helps resolve inconsistencies in prior findings and explains how legal protection is important for borrowing by firms.  In particular, they find that legal effectiveness is important for determining the amount, maturity, and currency denomination of debt.  The authors discuss several mechanisms by which firms can avoid the costs of poor legal systems with foreign borrowing.  The paper contributes to the policy debate surrounding the importance of creditor rights for domestic lending. "--World Bank web site.
Notes: Includes bibliographical references.
Title from PDF file as viewed on 4/7/2005.
Also available in print.
System requirements: Adobe Acrobat Reader.
Mode of access: World Wide Web.