Working Paper: NBER ID: w26446
Authors: Kenichi Ueda; Somnath Sharma
Abstract: Using the firm-level data of 33 countries over 10 years (from 2008-2017), we find that the listed firms, on average, have lower marginal products of capital (measured by return on assets) than the unlisted firms in many countries. This implies that the listed firms face less financial constraints. Moreover, we investigate the institutional factors that exacerbate or mitigate the listing advantages across the countries. The listing advantages seem enlarged with better corporate governance and narrowed with stronger creditor's rights.
Keywords: corporate finance; firm dynamics; financial constraints; listing advantages
JEL Codes: E22; G32
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Return on Assets (ROA) (G31) | Marginal Product of Capital (MPK) (D24) |
| Firm Listing Status (G24) | Debt-to-Asset Ratio (G32) |
| Debt-to-Asset Ratio (G32) | Financial Constraints (D20) |
| Better Corporate Governance (G38) | Listing Advantages (L85) |
| Stronger Creditors' Rights (G33) | Listing Advantages (L85) |
| Firm Listing Status (G24) | Return on Assets (ROA) (G31) |