Capital market financing and firm growth

This paper studies whether there is a connection between finance and growth at the firm level. It employs new dataset of 150,165 equity bond issuances around world, matched with income balance sheet data for 62,653 listed firms in 65 countries over 1990–2016. Three main patterns emerge from analyses. First, that choose to issue capital markets use funds raised grow by enhancing their productive capabilities, increasing tangible intangible number employees. Growth accelerates as raise funds. Second, faster more pronounced among are likely face tighter financing constraints, namely, small, young, high-R&D firms. Third, market associated located developed relative banks. Capital also comparatively effective allowing financially constrained capital.