Financial Market Constraints and Private Investment in a Developing Country

Author/Editor:

Omotunde E. G. Johnson

Publication Date:

December 1, 1990

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

Firms in developing countries that seek outside financing for investment must often choose their debt-equity combinations in the face of financial market constraints on debt service, on outside equity financing, and on internal finance (endowments). Inefficiencies in the allocation of available finance and in the equity-debt choices that can ensue can be prevented by appropriate policy measures to improve information on profitable investment opportunities and about firms; to directly strengthen financial intermediation; and to support appropriate credit guarantee schemes.

Series:

Working Paper No. 1990/121

Subject:

Bank credit Banking Debt financing Stock markets Stocks

English

Publication Date:

December 1, 1990

ISBN/ISSN:

9781451939163/1018-5941

Stock No:

WPIEA1211990

Pages:

31

Please address any questions about this title to publications@imf.org