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World Bank Development Research Group Finance and Private Sector Development Team

Overview
Works: 136 works in 143 publications in 1 language and 2,644 library holdings
Publication Timeline
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Most widely held works by World Bank
Directing Remittances to Education with Soft and Hard Commitments Evidence from a Lab-in-the-Field Experiment and New Product Take-up among Filipino Migrants in Rome by Giuseppe De Arcangelis( )

1 edition published in 2014 in English and held by 83 WorldCat member libraries worldwide

This paper tests how migrants' willingness to remit changes when given the ability to direct remittances to educational purposes using different forms of commitment. Variants of a dictator game in a lab-in-the-field experiment with Filipino migrants in Rome are used to examine remitting behavior under varying degrees of commitment. These range from the soft commitment of simply labeling remittances as being for education, to the hard commitment of having funds directly paid to a school and the student's educational performance monitored. The analysis finds that the introduction of simple labeling for education raises remittances by more than 15 percent. Adding the ability to directly send this funding to the school adds only a further 2.2 percent. The information asymmetry between migrants and their most closely connected household is randomly varied, but no significant change is found in the remittance response to these forms of commitment as information varies. Behavior in these games is shown to be predictive of take-up of a new financial product called EduPay, designed to allow migrants to pay remittances directly to schools in the Philippines. This take-up seems largely driven by a response to the ability to label remittances for education, rather than to the hard commitment feature of directly paying schools
Small business tax policy, informality, and tax evasion evidence from Georgia by Miriam Bruhn( )

1 edition published in 2014 in English and held by 64 WorldCat member libraries worldwide

Using a panel of administrative data and regression discontinuity analysis, this paper examines how the introduction of preferential tax regimes for Georgian micro and small businesses in 2010 affects formal firm creation and tax compliance. The results show that the new tax regime for micro businesses increased the number of newly registered formal firms by 18-30 percent below the eligibility threshold during the first year of the reform, but not in subsequent years. The analysis does not find an effect of the new tax regime for small businesses on formal firm creation in any year. Policy makers are often concerned about abuse risks stemming from differentiated tax treatment of micro and small businesses. The analysis in this paper reveals reduced tax compliance in 2010 around the micro business eligibility threshold, but does not find significant evidence of reduced compliance by Georgian firms in later years. The results also do not show any significant evidence of strategic sorting around the regime eligibility thresholds
Formal finance and trade credit during China's transition by Robert Cull( )

2 editions published in 2007 in English and held by 62 WorldCat member libraries worldwide

Using a large panel dataset of Chinese industrial firms, the authors examine the determinants of access to loans from formal financial intermediaries and extension of trade credit. Poorly performing state-owned enterprises were more likely to redistribute credit to firms with less privileged access to loans through trade credit, a pattern consistent with some of the extension of trade credit being involuntary. By contrast, profitable private domestic firms were more likely to extend trade credit than unprofitable ones. Trade credit likely provided a substitute for loans for these private firms' customers that were shut out of formal credit markets. As biases in lending became less severe, the amount of trade credit extended by private firms declined
Strategic information revelation and capital allocation by Alvaro Pedraza Morales( )

1 edition published in 2014 in English and held by 62 WorldCat member libraries worldwide

"It is commonly believed that stock prices help firms' managers make more efficient real investment decisions, because they aggregate information about fundamentals that is not otherwise known to managers. This paper identifies a limitation to this view. It shows that if informed traders internalize that firms use prices as a signal, stock price informativeness depends on the quality of managers' prior information. In particular, managers with low quality information would like to learn about their own fundamentals by relying on the information aggregated in the stock price. However, in this case, the profitability of trading falls for informed speculators, who therefore reduce their trading volume, reducing the informativeness of prices. As a result, stock prices are not as useful in guiding capital toward its most productive use, leading to inefficient investment decisions. Using a sample of U.S. publicly traded companies between 1990 and 2010, the paper documents a positive correlation between the quality of managerial information and stock price informativeness. Contrary to the conventional view that less informed managers should rely more on stock prices when making investment decisions, the author finds no differences in the sensitivity of investment to stock prices for different levels of managerial information. The evidence suggests that while firms do learn from prices, the learning channel and its effects on real investment are limited"--Abstract
Deals and delays : firm-level evidence on corruption and policy implementation times by Caroline L Freund( )

1 edition published in 2014 in English and held by 61 WorldCat member libraries worldwide

This paper examines whether demands for bribes for particular government services are associated with expedited or delayed policy implementation. The "grease the wheels" hypothesis, which contends that bribes act as speed money, implies three testable predictions. First, on average, bribe requests should be negatively correlated with wait times. Second, this relationship should vary across firms, with those with the highest opportunity cost of waiting being more likely to pay and face shorter delays. Third, the role of grease should vary across countries, with benefits larger where regulatory burdens are greatest. The data are inconsistent with all three predictions. According to the preferred specifications, ceteris paribus, firms confronted with demands for bribes take approximately 1.5 times longer to get a construction permit, operating license, or electrical connection than firms that did not have to pay bribes and, respectively, 1.2 and 1.4 times longer to clear customs when exporting and importing. The results are robust to controlling for firm fixed effects and at odds with the notion that corruption enhances efficiency
Bank Ownership and Lending Patterns during the 2008-2009 Financial Crisis Evidence from Latin America and Eastern Europe by Robert J Cull( )

2 editions published in 2012 in English and held by 59 WorldCat member libraries worldwide

This paper examines the impact of bank ownership on credit growth in developing countries before and during the 2008-2009 crisis. Using bank-level data for countries in Eastern Europe and Latin America, it analyzes the growth of banks' total gross loans as well as the growth of corporate, consumer, and residential mortgage loans. Although domestic private banks in Eastern Europe and Latin America contracted their loan growth rates during the crisis, there are differences in foreign and government-owned bank credit growth across regions. In Eastern Europe, foreign bank total lending fell by more than domestic private bank credit. These results are primarily driven by reductions in corporate loans. Furthermore, government-owned banks in Eastern Europe did not act counter-cyclically. The opposite was true in Latin America, where the growth of government-owned banks' corporate and consumer loans during the crisis exceeded that of domestic and foreign banks. Contrary to the case of foreign banks in Eastern Europe, those in Latin America did not fuel loan growth prior to the crisis and did not contract lending at a faster pace than domestic banks during the crisis
Determinants of long-term versus short-term bank credit in EU countries by Haelim Park( )

1 edition published in 2015 in English and held by 59 WorldCat member libraries worldwide

This paper empirically examines the determinants of credit at different maturities across European Union countries during the last decade. The paper documents the lengthening of maturities since the early 2000s, and whether these patterns were driven by similar factors in advanced countries and in emerging market countries. Before the 2008 crisis, long-term credit expanded faster than short-term credit in most countries in the sample, and contracted less than short-term credit after 2008. The paper finds that domestic deposits and foreign liabilities were more important sources of funding in emerging market countries than in advanced countries. Moreover, trade openness and initial banking sector depth matter more for emerging market countries than for advanced countries
Measuring financial inclusion : the Global Findex database by Aslı Demirgüç-Kunt( )

2 editions published in 2012 in English and held by 57 WorldCat member libraries worldwide

This paper provides the first analysis of the Global Financial Inclusion (Global Findex) Database, a new set of indicators that measure how adults in 148 economies save, borrow, make payments, and manage risk. The data show that 50 percent of adults worldwide have an account at a formal financial institution, though account penetration varies widely across regions, income groups and individual characteristics. In addition, 22 percent of adults report having saved at a formal financial institution in the past 12 months, and 9 percent report having taken out a new loan from a bank, credit union or microfinance institution in the past year. Although half of adults around the world remain unbanked, at least 35 percent of them report barriers to account use that might be addressed by public policy. Among the most commonly reported barriers are high cost, physical distance, and lack of proper documentation, though there are significant differences across regions and individual characteristics
Internet as a general-purpose technology : firm-level evidence from around the world by George R. G Clarke( )

1 edition published in 2015 in English and held by 57 WorldCat member libraries worldwide

This paper uses firm-level data to assess whether telecommunication services are general-purpose technologies (technologies that benefit a large segment of the economy and have long-lasting effect). It finds that only Internet services are so: firm growth and productivity are much higher when Internet access is greater and when firms use the Internet more intensively; and Internet access benefits firms in high- and low-tech industries, firms of all sizes, and exporter and non-exporter firms. Small firms appear to benefit more from the Internet than large firms do. In contrast, fixed-line and cellular services are not robustly linked to firm performance
The ABCs of financial education : experimental evidence on attitudes, behavior, and cognitive biases( )

1 edition published in 2015 in English and held by 56 WorldCat member libraries worldwide

This paper uses a large scale field experiment in India to study attitudinal, behavioral, and cognitive constraints that stymie the link between financial education and financial outcomes. The study complements financial education with (i) participant classroom motivation with pay for performance on a knowledge test, (ii) intensity of treatment with personalized financial counseling, and (iii) behavioral nudges with financial goal setting. The analysis finds no impact of pay for performance but significant effects of both counseling and goal setting on real financial outcomes. These results identify important complements to financial education that can bridge the gap between financial knowledge and financial behavior change
Informal firms and financial inclusion : status and determinants by Subika Farazi( )

1 edition published in 2014 in English and held by 56 WorldCat member libraries worldwide

Many firms in the developing world-including a majority of micro, small, and medium enterprises-operate in the informal economy. The informal firms face a variety of constraints, making it harder for them to do business and grow. Lack of access to finance is often cited as the biggest operational constraint these firms face. This paper documents the use of finance and financing patterns of informal firms, highlights differences between use of finance by formal and informal firms, and identifies the most significant characteristics of informal firms that are associated with higher use of financial services. The analysis shows that use of loans and bank accounts for business by informal firms is very low and a vast majority finances their day-to-day operations and investments through sources other than financial institutions (internal funds, moneylenders, family, and friends). A majority of informal firm owners would like their firms to become formal but do not do so as it would require them to pay taxes. Registered firms are 54 percent more likely to have a bank account and 32 percent more likely to have loans. Results also show that firm size, the level of education of the owner, and whether the owner has a job in the formal sector are significantly associated with financial inclusion of informal firms
The economic effects of a borrower bailout evidence from an emerging market by Xavier Gine( )

1 edition published in 2014 in English and held by 56 WorldCat member libraries worldwide

This paper studies the credit market implications and real effects of one the largest borrower bailout programs in history, enacted by the government of India against the backdrop of the 2008-2009 financial crisis. The study finds that the stimulus program had no effect on productivity, wages, or consumption, but led to significant changes in credit allocation and an increase in defaults. Post-program loan performance declines faster in districts with greater exposure to the program, an effect that is not driven by greater risk-taking of banks. Loan defaults become significantly more sensitive to the electoral cycle after the program, suggesting the anticipation of future credit market interventions as an important channel through which moral hazard in loan repayment is intensified
The impact of vocational training for the unemployed experimental evidence from Turkey by Sarojini Hirshleifer( )

1 edition published in 2014 in English and held by 55 WorldCat member libraries worldwide

"A randomized experiment is used to evaluate a large-scale, active labor market policy: Turkey's vocational training programs for the unemployed. A detailed follow-up survey of a large sample with low attrition enables precise estimation of treatment impacts and their heterogeneity. The average impact of training on employment is positive, but close to zero and statistically insignificant, which is much lower than either program officials or applicants expected. Over the first year after training, the paper finds that training had statistically significant effects on the quality of employment and that the positive impacts are stronger when training is offered by private providers. However, longer-term administrative data show that after three years these effects have also dissipated"--Abstract
Water quality, brawn, and education : the rural drinking water program in China by Lixin Colin Xu( )

1 edition published in 2014 in English and held by 55 WorldCat member libraries worldwide

Although previous research has demonstrated the health benefits of water treatment programs, relatively little is known about the effect of water treatment on education. This paper examines the educational benefits to rural youth in China of a major drinking water treatment program started in the 1980s, perhaps the largest of such programs in the world. By employing a cross-sectional data set (constructed from a longitudinal data set covering two decades) with more than 4,700 individuals between 18 and 25 years old, the analysis finds that this health program has improved the individuals' education substantially, increasing the grades of education completed by 1.08 years. The qualitative results hold when the analysis controls for local educational policies and resources, village dummies, and distance of villages to schools, and by instrumenting the water treatment dummy with villages' topographic features, among others. Moreover, three findings render support to the brawn theory of gender division of labor: girls benefit much more from water treatment than boys in schooling attainment; youth with an older brother benefit more than youth with an older sister; and boys gain more body mass than girls do from having access to treated water. The program can account for the gender gap in educational attainment in rural China in the sample period. Young people that had access to treated plant water in early childhood (0-2 years of age) experienced significantly higher gains in education than those who were exposed to treated water after early childhood. The estimates suggest that this program is highly cost-effective
Love, money, and old age support : does parental matchmaking matter? by Fali Huang( )

1 edition published in 2015 in English and held by 54 WorldCat member libraries worldwide

Parental involvement in matchmaking may distort the choice of spouse because parents are willing to substitute love for market and household production, which are more sharable between parents and their children. This paper finds supportive evidence in a survey of Chinese couples. In both rural and urban areas, parent matchmaking is associated with less marital harmony between the couple, more submissive wives, and a stronger belief in old age support for the son. In contrast, its association with couple income differs by rural and urban regions, perhaps because of differences in earning opportunities and in the enforcement of the one-child policy. Moreover, parent matchmaking is associated with more children for the couple and lower schooling for wives only in rural areas. Thus, in places with a stronger need for old age support, parents tend to be involved in matchmaking and use it to select submissive daughters-in-law to ensure old age support. The results render support to Becker, Murphy and Spenckuch (2015), who imply that parents would meddle with children's preferences to ensure their commitment to providing old age support
Why don't remittances appear to affect growth? by Michael A Clemens( )

1 edition published in 2014 in English and held by 54 WorldCat member libraries worldwide

Although measured remittances by migrant workers have soared in recent years, macroeconomic studies have difficulty detecting their effect on economic growth. This paper reviews existing explanations for this puzzle and proposes three new ones. First, it offers evidence that a large majority of the recent rise in measured remittances may be illusory-arising from changes in measurement, not changes in real financial flows. Second, it shows that even if these increases were correctly measured, cross-country regressions would have too little power to detect their effects on growth. Third, it points out that the greatest driver of rising remittances is rising migration, which has an opportunity cost to economic product at the origin. Net of that cost, there is little reason to expect large growth effects of remittances in the origin economy. Migration and remittances clearly have first-order effects on poverty at the origin, on the welfare of migrants and their families, and on global gross domestic product; but detecting their effects on growth of the origin economy is likely to remain elusive
The impact of credit information sharing reforms on firm financing? by Maria Soledad Martinez Peria( )

1 edition published in 2014 in English and held by 54 WorldCat member libraries worldwide

This paper analyzes the impact of introducing credit information-sharing systems on firms' access to finance. The analysis uses multi-year, firm-level surveys for 63 countries covering more than 75,000 firms over the period 2002-13. The results reveal that credit bureau reforms, but not credit registry reforms, have a significant and robust effect on firm financing. After the introduction of a credit bureau, the likelihood that a firm has access to finance increases, interest rates drop, maturity lengthens, and the share of working capital financed by banks increases. The effects of credit bureau reforms are more pronounced the greater the coverage of the credit bureau and the scope and accessibility of the credit information-sharing scheme. Credit bureau reforms also have a greater impact on firms' access to finance in countries where contract enforcement is weaker. Finally, there is some evidence that the effects of credit bureau reform are more pronounced for smaller, less experienced, and more opaque firms
The African financial development and financial inclusion gaps( )

1 edition published in 2014 in English and held by 53 WorldCat member libraries worldwide

This paper investigates the African financial development and financial inclusion gaps relative to other peer developing countries. The paper uses a set of variables related to financial development and inclusion. It first estimates the gaps between African countries and other developing countries with similar degrees of economic development. Then, it explores the determinants of financial development and inclusion. The analysis finds that population density is considerably more important for financial development and inclusion in Africa than elsewhere. Finally, the paper shows evidence that a recent innovation in financial services, mobile banking, has helped to overcome infrastructural problems and improve financial access
Short-term impacts of formalization assistance and a bank information session on business registration and access to finance in Malawi by Francisco Campos( )

1 edition published in 2015 in English and held by 53 WorldCat member libraries worldwide

Despite regulatory efforts designed to make it easier for firms to formalize, informality remains extremely high among firms in Sub-Saharan Africa. In most of the region, business registration in a national registry is separate from tax registration. This paper provides initial results from an experiment in Malawi that randomly allocated firms into a control group and three treatment groups: a) a group offered assistance for costless business registration; b) a group offered assistance with costless business registration and (separate) tax registration; and c) a group offered assistance for costless business registration along with an information session at a bank that ended with the offer of business bank accounts. The study finds that all three treatments had extremely large impacts on business registration, with 75 percent of those offered assistance receiving a business registration certificate. The findings offer a cost-effective way of getting firms to formalize in this dimension. However, in common with other studies, information and assistance has a limited impact on tax registration. The paper measures the short-term impacts of formalization on financial access and usage. Business registration alone has no impact for either men or women on bank account usage, savings, or credit. However, the combination of formalization assistance and the bank information session results in significant impacts on having a business bank account, financial practices, savings, and use of complementary financial products
The dark side of disclosure : evidence of government expropriation from worldwide firms by Tingting Liu( )

1 edition published in 2015 in English and held by 52 WorldCat member libraries worldwide

This paper studies the effects of voluntary accounting information disclosure through auditing on firm access to finance, exposure to corruption, and sales growth. Relying on a data set of more than 70,000 firms in 121 countries, the analysis finds that disclosure can be a double-edged sword. On the one hand, audited firms exhibit a slightly lower level of financial constraints than unaudited firms. On the other hand, audited firms face a significantly higher level of corruption obstacles. The net effects of voluntary information disclosure on firm growth are negative, which can largely be explained by the fact that most of the countries in the sample are developing countries where institutions are weak. The beneficial effect of disclosure increases as a country's property rights protection improves. The qualitative results are robust to considerations of the endogeneity of auditing and to alternative measures of corruption and financial constraints. The findings reveal the dark side of voluntary information disclosure: exposing firms to government expropriation where institutions are weak
 
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Alternative Names

controlled identityWorld Bank. Development Research Group. Finance

controlled identityWorld Bank. Development Research Group. Growth and Investment Team

World Bank. Development Research Group. Private and Financial Sectors Development Unit

Languages
English (23)