At the forefront of growth and development in Asia and the Pacific

Seminar: The Financing and Growth of Firms in PRC and India: Evidence from Capital Markets

Event | 26 June 2013 ADBI, Tokyo, Japan


ADBI's Seminar Series brings eminent persons to ADBI to encourage debate among policymakers, researchers, academics, think tanks and other audiences interested in economic development challenges in Asia, the Pacific, and Europe.


To what extent did firms in the People's Republic of China and India use capital markets to obtain financing and grow? Using unique data on domestic and international capital raising activity and firm performance, Tatiana Didier and Sergio Schmukler show that the expansion of financial market activity since the 1990s has been more limited than the aggregate figures might suggest. Relatively few firms raise capital. Even fewer firms capture the bulk of the financing. Moreover, firms that issue equity or bonds are different and behave differently from other publicly listed firms. Among other things, they are typically larger and grow faster. The differences between users and non-users exist before the capital raising activity, are associated with the probability of raising capital, and become more accentuated afterward. The distribution of issuing firms shifts more over time than the distribution of those that do not issue, suggesting little convergence in firm size among listed firms.

Sergio Schmukler is Lead Economist at the World Bank Research Department. He obtained his PhD from U.C. Berkeley in 1997, when he joined the World Bank. He has also been treasurer of the Latin America and Caribbean Economic Association since 2004, associate editor of the Journal of Development Economics (2001–2004), taught at the Department of Economics, University of Maryland (1999–2003), and worked at the International Monetary Fund Research Department (2004–2005). Previously, he worked at the US Federal Reserve Board, the Inter-American Development Bank Research Department, and the Argentine Central Bank. His research area is international finance and international financial markets and institutions. He has published many articles in leading academic journals and edited volumes on emerging market finance, financial globalization, financial crises and contagion, financial development, and institutional investors. He also co-authored and edited four books published by Elsevier, McGraw Hill, Stanford University Press, and the World Bank.

Tatiana Didier is a Senior Economist at the World Bank. She obtained her PhD from MIT in 2008, when she joined the Office of the Chief Economist for Latin America and the Caribbean. She has been published in the area of international macroeconomics and finance in top journals such as the Journal of Monetary Economics and the Review of Economics and Statistics. She is conducting research on international capital flows, institutional investors, financial crises and their implications for the development of domestic financial systems.


Policymakers, academics and the general public.