Selasa, 14 Oktober 2014

Financial Intermediation, Markets, and Alternative Financial Sectors


by : Franklin Allen, Elena Carletti, Jun “QJ” Qian & Patricio Valenzuela
Finance Department, Wharton School, University of Pennsylvania, Philadelphia, PA 19104
March 25, 2012

Abstract
We provide a comprehensive review of firms’ financing channels (internal and external, domestic and international) around the globe, with the focus on alternative finance—financing from all the nonmarket, non-bank external sources. We argue that while traditional financing channels, including financial markets and banks, provide significant sources of funds for firms in developed countries, alternative financing channels provide an equally important source of funds in both developed and developing countries. Alternative finance is often the dominant source of funds for firms in fastgrowing economies. We compare market- and bank-finance with alternative finance, along with the supporting mechanisms such as legal and institutional structures. Much more research is needed to better understand alternative finance and its role in corporate financing. We suggest ways to obtain
firm-level data on various forms of alternative finance and thus overcome the main obstacle in the field.

Keywords: alternative finance, markets, banks, trade credits, governance, growth.

1. Introduction
Since corporate investment is a key driver for economic growth, a central question in financial economics is how firms raise capital to finance their investment. During the past few decades, economists have significantly advanced knowledge in this field by studying the link between economic growth and financial system development. A financial system includes a financial intermediation sector and financial markets, where firms issue securities such as stocks and bonds. This literature argues that a more advanced financial system can better allocate resources so that firms (both domestic and foreign) can finance their investment and growth at . . . . . . . . . . (read more)



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