《上海财经大学的公司治理博士课程 property rights and finance》由会员分享，可在线阅读，更多相关《上海财经大学的公司治理博士课程 property rights and finance（22页珍藏版）》请在金锄头文库上搜索。
1、Property Rights and Finance By SIMONJOHNSON, JOHNMCMILLAN,ANDCHRISTOPHERWOODRUFF* Which is the tighter constraint on private sector investment: weak property rights or limited access to external fi nance? From a survey of new fi rms in post-communist countries, we fi nd that weak property rights dis
2、courage fi rms from reinvesting their profi ts, even when bank loans are available. Where property rights are relatively strong, fi rms reinvest their profi ts; where they are relatively weak, entrepreneurs do not want to invest from retained earnings. (JEL D23, P23) Property rights are fundamental:
3、 entrepre- neurs will not invest if they expect to be unable to keep the fruits of their investment. Country- level studies consistently show that less secure property rights are correlated with lower ag- gregateinvestmentandslowereconomic growth (Stephen Knack and Philip Keefer, 1995; Paolo Mauro,
4、1995; Jakob Svensson, 1998; Daron Acemoglu et al., 2001). The mi- croeconomic evidence is more limited, but Tim- othy Besley (1995), for example, fi nds in Ghana a signifi cant link between property rights and investment. Secure property rights may be necessary for entrepreneurial investment, but ar
5、e they suffi - cient? External fi nance could also matter for investment and growth, for if bank credit is not available it may be hard for entrepreneurs to take advantage of new opportunities. There is evidence that a well-functioning fi nancial sys- tem contributes to investment and growth (Ross L
6、evine, 1997; Raghuram Rajan and Luigi Zingales, 1998). Is external fi nance, in addition to secure property rights, necessary for entrepreneurs to invest, or is property-rights security all that is needed? Broad cross-country studies cannot an- swer this question because effective protection for pro
7、perty rights is positively correlated with the use of external fi nance. For example, Rafael La Porta et al. (1997, 1998, 2000) show more external fi nance is available when there is a stronger legal system in general and more ef- fective protection of investors in particular, while Asli Demirgu c -
8、Kunt and Vojislav Mak- simovic (1998) fi nd that fi rms invest more from external funds in countries with secure property rights. Recent experience in Eastern Europe and the former Soviet Union offers an experiment that can help disentangle the effects of property rights and external fi nance. Altho
9、ugh all these former communist countries have relatively weak institutional environments, there is con- siderable variation in the extent to which prop- erty rights are protected. For example, Timothy Frye and Shleifer (1997) and Shleifer (1997) provide evidence that the Russian government acts like
10、 a “grabbing hand,” discouraging entre- preneurs from investing, while the Polish gov- ernment does not. In general, property rights have proven more secure in Poland than in other parts of Eastern Europe and the former Soviet Union. Within countries, also, there is variation in both the perceived s
11、ecurity of property rights and in the access to bank credit. Given these countries banking systems, small fi rms are able to borrow only if they can provide adequate collateral. Owning collateral is therefore a good proxy for at least having the possibility to * Johnson: Sloan School of Management,
12、MIT, 50 Me- morial Drive, Cambridge, MA 02142 (e-mail: sjohnson mit.edu); McMillan: Graduate School of Business, Stanford University, 518 Memorial Way, Stanford, CA 94305 (e-mail: mcmillan_johngsb.stanford.edu); Woodruff: Grad- uate School of International Relations and Pacifi c Studies, University
13、of California-San Diego, La Jolla, CA 92093 (e-mail: cwoodruffucsd.edu). We thank Timothy Besley, Bengt Holmstro m, Takeo Hoshi, James Rauch, Andrei Shleifer, and two anonymous referees for comments, Todd Mitton for help with the Worldscope data, Mark Schanker- man for help in facilitating the surve
14、ys, and the European Bank for Reconstruction and Development for funding the surveys in Poland, Slovakia, and Romania, and the National Council for Soviet and East European Research for funding the surveys in Russia and Ukraine. For support, Johnson thanks the MIT Entrepreneurship Center and McMilla
15、n thanks the Stanford Graduate School of Business. 1335 borrow. Firm-level evidence from these post- communist countries therefore allows us to de- termine whether secure property rights are (a) necessary, (b) suffi cient, or (c) necessary and suffi cient for investment by entrepreneurs. Our data co
16、me from a 1997 survey of re- cently formed and relatively small manufactur- ing fi rms in fi ve transition countries: Poland, Romania, Slovakia, Ukraine, and Russia. The perceived security of property rights and the use of bank credit vary considerably both across and within these countries. As an outcome variable, we focus on the amount entrepreneurs choose to reinvest out of their profi ts. This provides a robust measure of investment, as our survey work indicates, that is comparable ac
