Using a panel of five Asian economies -Indonesia, Korea, Malaysia, Singapore and Thailand -over the period 1995-2007 we analyze the links between firm survival and financial development. We find that traditionally used measures of financial development play an important role in influencing firm survival. When stock markets become larger or more liquid firms' survival chances improve. On the contrary, we show that higher levels of financial intermediation can increase firm failures. We also find that the beneficial effects of stock market development are more pronounced during the later years of our sample, while the adverse effects of bank intermediation have declined over time. Finally, large firms are more likely to benefit from developments in financial markets compared to small firms.
Using a panel of mainly unquoted UK firms over the period 2000-09, we document a significant effect of changes in the interest burden from debt-servicing on firm survival. The effect is found to be stronger during the recent financial crisis compared with more tranquil periods. Furthermore, the survival chances of bank-dependent, younger, and nonexporting firms are most affected by changes in the interest burden, especially during the crisis. Our results are robust to using different estimation methods and different interest burden measures. They suggest that one way for policymakers to mitigate the effects of financial crises by limiting firm failures would be to prevent financing costs from rising, especially for those firms more likely to face liquidity constraints.(Word count: 8,746+ 3 tables= 10, 246) * JEL Classification numbers: D21; E22; E32; G31. We thank the Editor and two anonymous referees for very helpful comments and suggestions. We are also grateful to
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