01850cas a2200265 a 4500 AALejournalIMF006779 230101c9999 xx r poo 0 0eng d 5.00 USD 9781455209316 1018-5941 BD-DhAAL BD-DhAAL Yafeh, Yishay. Financial Frictions, Investment, and Institutions / Yishay Yafeh, Kenichi Ueda, Stijn Claessens. Washington, D.C. : International Monetary Fund, 2010. 1 online resource (45 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students 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. Mode of access: Internet Claessens, Stijn. Ueda, Kenichi. IMF Working Papers; Working Paper ; No. 2010/231 Full text available on IMF http://elibrary.imf.org/view/journals/001/2010/231/001.2010.issue-231-en.xml IMF e-Library