01833cas a2200253 a 4500 AALejournalIMF017792 230101c9999 xx r poo 0 0eng d 5.00 USD 9781484314197 1018-5941 BD-DhAAL BD-DhAAL Dao, Mai Chi. Finance and Employment in Developing Countries : The Working Capital Channel / Mai Chi Dao, Lucy Qian Liu. Washington, D.C. : International Monetary Fund, 2017. 1 online resource (47 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 We study the effect of external financing constraint on job creation in emerging markets and developing countries (EMDC) at the firm level by looking at a specific transmission channel - the working capital channel. We develop a simple model to illustrate how the need for working capital financing of a firm affects the link between financial constraint and the firm's job creation. We show that the effect of relaxing financial constraint on job creation is greater the smaller the firm scale and the more labor-intensive its production structure. We use the World Bank Enterprise Surveys data to test the main predictions of the model, and find strong evidence for the working capital channel of external finance on firm employment. Mode of access: Internet Liu, Lucy Qian. IMF Working Papers; Working Paper ; No. 2017/189 Full text available on IMF http://elibrary.imf.org/view/journals/001/2017/189/001.2017.issue-189-en.xml IMF e-Library