TY - BOOK ID - 84543089 TI - Financial frictions, investment, and institutions AU - Claessens, Stijn. AU - Ueda, Kenichi. AU - Yafeh, Yishay. PY - 2010 SN - 1462326471 1455285986 1283554208 9786613866653 1455209899 PB - Washington, D.C. : International Monetary Fund, DB - UniCat KW - Finance: General KW - Investments: Stocks KW - Economic Theory KW - Corporate Governance KW - Corporate Finance and Governance: General KW - Economic Development: Financial Markets KW - Saving and Capital Investment KW - Corporate Finance and Governance KW - Institutions and Growth KW - Corporate Finance and Governance: Government Policy and Regulation KW - Financial Economics KW - General Financial Markets: General (includes Measurement and Data) KW - Pension Funds KW - Non-bank Financial Institutions KW - Financial Instruments KW - Institutional Investors KW - Corporate governance KW - role & responsibilities of boards & directors KW - Economic theory & philosophy KW - Finance KW - Investment & securities KW - Financial frictions KW - Competition KW - Commodity markets KW - Stocks KW - Economic sectors KW - Economic theory KW - Financial markets KW - Financial institutions KW - Economic forecasting KW - Commodity exchanges KW - United States KW - Economic development KW - Business cycles. KW - Econometric models. UR - https://www.unicat.be/uniCat?func=search&query=sysid:84543089 AB - Financial frictions have been identified as key factors affecting economic fluctuations and growth. But, can institutional reforms reduce financial frictions? Based on a canonical investment model, we consider two potential channels: (i) financial transaction costs at the firm level; and (ii) required return at the country level. We empirically investigate the effects of institutions on these financial frictions using a panel of 75,000 firm-years across 48 countries for the period 1990 - 2007. We find that improved corporate governance (e.g., less informational problems) and enhanced contractual enforcement reduce financial frictions, while stronger creditor rights (e.g., lower collateral constraints) are less important. ER -