Professional Documents
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Cai 2009
Cai 2009
APRIL 2010
Table of Contents
Capital Access Index 2009: A Reversal of Fortunes.................................................................1 Ranking Countries for Access to Capital.................................................................................3 Top Ten..........................................................................................................................4 Big Movers.....................................................................................................................6 Top Half.........................................................................................................................6 Bottom Half...................................................................................................................7 Appendix A: Methodology...................................................................................................15 Appendix B: Capital Access Index Components....................................................................17 About the Authors...............................................................................................................24
Canada (1) Hong Kong (2) United Kingdom (4) Singapore (5) United States (6) Switzerland (3) Sweden (11) Australia (9) Netherlands (7) Finland (10)
10.
But emerging markets typically avoided the domino effect. Their growth slowed but did not sink. In general, they were simply better positioned than their U.S. and European counterparts because of larger market reserves, lower debt burdens, and stronger growth rates, due in large part to increased internal demand. Many developing nations were able to ride out the crisis while their industrialized counterparts were nearly trampled by it. Among those riding it out were East Asia countries, which did not exhibit the extreme vulnerability they experienced in the 1997 financial crisis. In China, economic growth remained strong because its prompt policy reactions offset the negative effects of the crisis. Still, developing nations were not completely immune, though the impacts were often more indirect than direct. For example, the sharp decline in imports by developed countries, especially the United States, led to worries as trade surpluses dropped significantly in countries such as China. For that matter, not all industrialized nations took a severe hit, with No. 1 ranked Canada in particular being a standout. (See sidebar on Page 5.) That nation benefited from a stable housing market that was not as heavily securitized as that of the United States and from strict capital reserve requirements that kept money flowing to the private sector. This is Canadas second year at the top of the Capital Access Index.
In the intervening months since the crisis started, major industrialized countries have used existing and innovative tools to mitigate the credit crunch and to stimulate the economy. To restart the credit markets, central banks all over the world cut target interest rates to historical lows in response to the crisis. In the United States, the government provided guarantees for some consumer and business loans, as well as for some mortgage-backed securities. By the end of 2008, many of these programs were already in place. European and Asian countries adopted similar strategies. However, some economists argue that loose monetary policies may again lead to excessive liquidity. Also in response to the crisis, worldwide efforts have been made to reduce excessive leverage at financial institutions. The International Monetary Fund, among many others, has called for coordinated regulatory changes to reduce systemic risk and enhance financial institutions capital base. Reforms are being proposed to rein in excessively risky, exotic financial derivatives. Some have proposed that the so-called shadow banking system the investment banks, hedge funds, and other non-banking intermediaries between investors and borrowersbe regulated by banking supervisors. To be sure, the goal of most of these measures is to promote healthier and more transparent financial systems. However, it is also true that reduced leverage at financial institutions will lead to less credit available for business borrowers, domestic or international. Consequently, the credit markets worldwide will be adversely affected, and both the financial sector and real sectors will suffer. World GDP growth was 3 percent in 2008 after adjusting for inflation, compared to 5.2 percent the previous year. The International Monetary Fund has projected that world GDP growth in 2009 would be negative 1 percent. In fact, the IMFs World Economic Outlook in October 2009 projected that 124 countries of 182 in its database would experience negative growth in 2009 compared with just seven countries in 2008 meaning the aftermath of the financial crisis had yet to fully impact the real sector worldwide. All the factors discussed above had an impact on this years Capital Access Index. Now in its 11th year, the Capital Access Index is a ranking tool designed to track the ability of businesses and entrepreneurs to access domestic and foreign capital in countries around the world. Today the CAI assesses the performance of the capital markets in 122 nations. It is used to examine macroeconomic and institutional factors that impact market efficiencies, and to identify factors that could signal a potential crisis or, conversely, contribute to improved access to capital. Signaling the ability of countries to provide and to attract foreign funding for businesses, the CAI has significant implications as countries today compete for jobs and capital. Keep in mind that the Capital Access Index is a ranking. It shows the relative strength of financing for businesses in different countries. This ranking needs to be interpreted carefully, together with trend data for each individual country. Perhaps most important, the CAI ranking points to the direction where improvements could be made to broaden access to business finance, which is critical to a countrys sustainable economic growth.
Macroeconomic environment: the favorableness of conditions for running and financing a business,
based on such variables as inflation, interest rates, tax rates, and financial sophistication relative to international norms
Institutional environment: the extent to which institutions support and enhance business financing
activities, based on variables that include the enforceability of property rights, the impartiality of the judicial system, the efficiency of bankruptcy procedures, and the levels of corruption
Equity market development: the importance of equity financing of business operations, based
on such variables as stock market capitalization relative to GDP , stock market liquidity, and changes in the number of listings
Bond market development: the importance of bond financing for businesses, based on variables
such as the value of private and public bonds relative to GDP and securitized asset issuance relative to GDP
Alternative sources of capital: the level of usage of diverse financing sources, such as venture
capital, credit cards, and non-public stock offerings or other private placements
International funding: the availability of foreign capital to businesses in a particular country, based
on such variables as the volatility of exchange rates, international reserve holdings, portfolio and foreign direct investment, capital inflows and outflows, and sovereign ratings
The Canadian housing market was relatively stable. In Canada, the housing market is not as heavily securitized as in the United States. In 2008, just 29 percent of all mortgages were securitized, compared with 69 percent in the United States. Lenders (mainly banks) held these unsecuritized mortgages on their balance sheets, bearing a substantial part of the risks related to these mortgages. Such constraints helped to improve lending standards and led to smoother, albeit much slower, growth in the housing sector. Perhaps most importantly, mortgage insurance played a significant role in reining in excessive speculation in the market. Canadian banks are subject to strict capital reserve requirements. Leverage caps are put on both tier 1 and tier 2 capital ratios. Off-balance-sheet exposures are also regulated, unlike in the United States. The more conservative approach of bank regulators helps ensure that banks have sufficient reserves even in a time of economic downturn to keep the capital flowing to the private sector.
Regulators engage in a delicate balancing act between growth and prudence. The excellent performance (relative to other developed countries) of the Canadian financial sector in the aftermath of the global financial crisis proves the Canadians are on the right track. Several challenges remain: The current account surplus weakened and likely continued to deteriorate in 2009. Equity financing has been slow. The housing market, though performing relatively well, still has suffered from slower sales of new homes. However, its strong institutional environment and solid banking sector should keep Canada safe through the financial storm.
1. Susan Bourette, In Canada, Obama gets warm welcome and tips on managing an economy, Christian Science Monitor, February 20, 2009. http://www.csmonitor.com/World/Americas/2009/0220/p25s16-woam.html (accessed March 24, 2010).
Switzerland, Sweden, Australia, the Netherlands, and Finland ranked sixth through 10th, respectively. While 2007 was a good year for Switzerlandit ranked third in the CAI, the highest position it has achieved in the past 10 yearsit lost three positions in 2008. Switzerland scored higher in institutional environment and in international funding but saw declines in the performance of all aspects of financial markets: equity market, bond market, banks and securitized market. In particular, bond issuance dropped 9 percent, and private placements dropped almost 50 percent relative to GDP . Six of the top 10 countries saw some decline in their financial and banking institutions scores. Six experienced worsening equity market performance. Five of them reported fewer activities in alternative capital. However, the institutional and macroeconomic environments remained relatively stable for these countries.
BRIC countriesBrazil, Russia, India and Chinawere all in the top half, and all saw some improvements in both their composite scores and rankings this year.
n
Brazil moved from No. 51 to No. 49, with significant advances in bond market development and alternative sources of capital. Russia ranked 54th this year, compared to 58th last year. The country saw improvements in all index components except for financial and banking institutions and equity market development. Like Brazils, Russias highlights were improvements in bond market development and alternative sources of capital. India moved from No. 47 to No. 44. It saw declines in macroeconomic environment and institutional environment scores but made progress in alternative sources of capital and in international funding.
Central African Republic plummeted 19 places, from No. 94 to No. 113, mainly as a result of deteriorating equity market conditions. Angola leaped 17 places, from No. 110 to No. 93, because of substantial improvements in macroeconomic environment and international funding. Syria dived 15 places from No. 92 to No. 107, placing it in the bottom 20. The only component that saw some progress in Syria was alternative sources of capital.
Moldova vaulted 14 places from No. 98 to No. 84. Moldova saw improvements in every component, but the greatest strides were in institutional environment and bond market development. Ukraines ranking continued to declinefrom No. 65 in 2007 to No. 74 in 2008, to No. 77 in the latest ranking.
Of the bottom 20 countries, 17 were African nations. Almost all suffered from further declines in their already dismal institutional environments, emphasizing the need for these countries to improve their economic infrastructure to provide a stable platform for private business financing.
MEAN: 4.73
10
RANK 2009 62 63 64 64 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 85 87 88 88 88 91 92 93 94 95 96 97 98 98 100 101 102 103 104 105 106 107 108 109 110 111 111 113 114 115 116 117 118 119 120 121 122
RANK 2008 62 65 60 59 70 54 66 68 71 75 69 81 73 72 80 74 77 82 83 86 85 79 98 84 92 78 98 89 88 87 76 110 90 100 103 105 95 97 95 102 101 109 108 110 104 92 106 113 91 114 106 94 115 121 117 122 116 119 110 120 118
COUNTRY El Salvador Indonesia Costa Rica Uruguay Jamaica Belarus Vietnam Botswana Namibia Kenya Sri Lanka Ghana Pakistan Argentina Guatemala Ukraine Nigeria Ecuador Iran Armenia Bosnia and Herzegovina Honduras Moldova Bangladesh Zimbabwe Dominican Republic Tanzania Venezuela Zambia Bolivia Papua New Guinea Angola Nicaragua Mongolia Yemen Malawi Paraguay Uganda Cambodia Lesotho Senegal Mozambique Cameroon Rwanda Burkina Faso Syria Benin Sierra Leone Ethiopia Laos Mali Central African Republic Togo Guinea Mauritania Republic of Congo Madagascar Chad Niger Haiti Burundi
CAI 2009 4.61 4.60 4.43 4.43 4.35 4.34 4.27 4.20 4.13 4.08 3.96 3.94 3.93 3.84 3.79 3.76 3.73 3.72 3.65 3.61 3.60 3.53 3.52 3.48 3.48 3.47 3.36 3.36 3.36 3.30 3.26 3.20 3.19 3.18 3.09 3.04 3.03 3.03 2.91 2.87 2.84 2.74 2.67 2.64 2.63 2.59 2.58 2.56 2.44 2.37 2.37 2.32 2.31 2.19 2.18 2.17 2.13 2.06 2.03 1.95 1.87
MEAN: 4.73
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Table 2 shows the component scores for different country groups. Industrialized countries, not surprisingly, remained strong in all seven components. The greatest gap between industrialized countries and other groups was in alternative funding. Among developing nations, Middle Eastern countries received the highest scores for macroeconomic environment, bond market development, institutional environment, and international funding, while developing European countries were relatively stronger in equity market development and alternative sources of capital. Developing Asian countries lost some momentum compared to the previous year. Overall, macroeconomic and institutional environments were the two strongest components driving the composite CAI scores for all nations, while alternative funding lagged for most developing countries. Table 2: Average of components for 2009 Capital Access Index
Industrialized countries Middle East Europe Asia Americas and the Caribbean Africa
Table 3 shows each nations CAI composite scores for the past three years. The average composite score for all countries was 4.73 in the 2009 index (see table 4), compared with 4.68 in the 2008 index and 4.71 in the 2007 index. The median scores were 4.62 in the 2009 index, 4.58 in the 2008 index, and 4.51 in the 2007 index. The higher median scores reflect some improvement among countries in the middle range. However, the gap between the best-performing country and the worst-performing country increased from 6.03 last year to 6.38 this year.
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Table 3: Capital Access Index scores and country rankings, 2007-2009 (cont.)
2009 CAI Panama Greece Slovakia Slovenia India Mexico Jordan Latvia Tunisia Brazil Egypt Poland Turkey Colombia Russia Bulgaria Croatia Romania Macedonia Peru Morocco Philippines El Salvador Indonesia Costa Rica Uruguay Jamaica Belarus Vietnam Botswana Namibia Kenya Sri Lanka Ghana Pakistan Argentina Guatemala Ukraine Nigeria 5.66 5.64 5.59 5.53 5.51 5.50 5.47 5.22 5.21 5.14 5.08 5.03 5.02 4.97 4.96 4.94 4.90 4.88 4.86 4.86 4.74 4.62 4.61 4.60 4.43 4.43 4.35 4.34 4.27 4.20 4.13 4.08 3.96 3.94 3.93 3.84 3.79 3.76 3.73 Rank 39 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 58 60 61 62 63 64 64 66 67 68 69 70 71 72 73 74 75 76 77 78 CAI 5.56 5.52 5.53 5.34 5.33 5.46 5.51 4.90 4.90 4.92 4.85 5.51 4.95 4.82 4.80 4.97 4.97 4.60 4.53 4.84 4.30 4.55 4.55 4.42 4.61 4.63 4.19 4.85 4.41 4.28 4.14 4.03 4.21 3.71 4.07 4.12 3.75 4.06 3.79 2008 Rank 38 41 40 46 47 44 42 52 52 51 54 42 50 57 58 48 48 61 64 56 67 62 62 65 60 59 70 54 66 68 71 75 69 81 73 72 80 74 77 CAI 5.53 5.87 5.29 5.22 5.50 5.78 5.14 5.61 4.60 4.76 4.36 5.54 4.97 4.76 5.00 4.85 4.77 4.66 4.30 4.98 4.08 4.50 4.95 4.40 4.22 4.77 4.52 4.46 3.98 4.29 4.04 3.67 4.11 3.81 4.06 4.52 3.83 4.36 3.40 2007 Rank 40 34 44 46 41 35 47 38 59 56 65 39 51 56 49 53 54 58 67 50 71 62 52 64 69 54 60 63 74 68 73 81 70 78 72 60 77 65 88
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Table 3: Capital Access Index scores and country rankings, 2007-2009 (cont.)
2009 CAI Ecuador Iran Armenia Bosnia and Herzegovina Honduras Moldova Bangladesh Zimbabwe Dominican Republic Tanzania Venezuela Zambia Bolivia Papua New Guinea Angola Nicaragua Mongolia Yemen Malawi Paraguay Uganda Cambodia Lesotho Senegal Mozambique Cameroon Rwanda Burkina Faso Syria Benin Sierra Leone Ethiopia Laos Mali Central African Republic Togo Guinea Mauritania Republic of Congo 3.72 3.65 3.61 3.60 3.53 3.52 3.48 3.48 3.47 3.36 3.36 3.36 3.30 3.26 3.20 3.19 3.18 3.09 3.04 3.03 3.03 2.91 2.87 2.84 2.74 2.67 2.64 2.63 2.59 2.58 2.56 2.44 2.37 2.37 2.32 2.31 2.19 2.18 2.17 Rank 79 80 81 82 83 84 85 85 87 88 88 88 91 92 93 94 95 96 97 98 98 100 101 102 103 104 105 106 107 108 109 110 111 111 113 114 115 116 117 CAI 3.59 3.57 3.50 3.52 3.76 3.07 3.53 3.12 3.77 3.07 3.23 3.25 3.43 4.01 2.46 3.22 3.01 2.82 2.78 3.09 3.08 3.09 2.84 2.89 2.48 2.63 2.46 2.79 3.12 2.72 2.44 3.13 2.37 2.72 3.10 2.24 1.89 2.11 1.87 2008 Rank 82 83 86 85 79 98 84 92 78 98 89 88 87 76 110 90 100 103 105 95 97 95 102 101 109 108 110 104 92 106 113 91 114 106 94 115 121 117 122 CAI 3.56 3.71 3.96 3.44 3.61 3.39 3.24 2.62 3.47 3.45 3.21 3.00 3.85 3.77 2.56 3.66 3.36 2.68 2.63 3.16 3.25 3.00 3.08 3.05 2.60 2.61 2.32 2.81 2.78 2.48 2.09 3.11 2.11 2.85 2.97 2.48 2.33 2.63 2.32 2007 Rank 84 80 75 87 83 89 92 107 85 86 93 98 76 79 110 82 90 104 105 94 91 98 96 97 109 108 117 102 103 111 120 95 119 101 100 111 116 105 117
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Table 3: Capital Access Index scores and country rankings, 2007-2009 (cont.)
2009 CAI Madagascar Chad Niger Haiti Burundi 2.13 2.06 2.03 1.95 1.87 Rank 118 119 120 121 122 CAI 2.14 2.02 2.46 1.94 2.05 2008 Rank 116 119 110 120 118 CAI 2.38 1.69 2.42 2.09 2.34 2007 Rank 114 122 113 120 115
The average score of each CAI component is summarized in table 4 for countries grouped by their rankings. The average score for all countries was lowest for alternative sources of capital, a result of the declining securitization market worldwide. For the first time, bond market development was not the weakest area of performance for all countries, primarily because bond issuance supported funding for businesses when bank lending sharply declined in many countries. The gap between the top and bottom 20 countries has enlarged. Last year the average scores for the two groups were 7.27 and 2.17, with a gap of 5.1; this year the gap grew to 5.26. The largest gap lies in alternative sources of capital, followed by equity market development. In fact, for the bottom 20 countries, equity markets and alternative sources of capital were almost nonexistent. Banks and bond issuancemainly government bondswere better developed in comparison. The gap has widened considerably in institutional environment and international funding, while it shrank somewhat in financial and banking institutions. Table 4: Component averages of 2009 Capital Access Index by ranking groups
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Appendix A: Methodology
The Capital Access Index is based on the evaluation of seven components: macroeconomic environment (ME), institutional environment (IE), financial and banking institutions (FI), equity market development (EM), bond market development (BM), alternative sources of capital (AC), and international funding (IF).
Macroeconomic environment: the favorableness of conditions for running and financing a business,
based on such variables as inflation, interest rates, tax rates, and financial sophistication relative to international norms
Institutional environment: the extent to which institutions support and enhance business financing
activities, based on variables that include the enforceability of property rights, the impartiality of the judicial system, the efficiency of bankruptcy procedures, and the levels of corruption
Equity market development: the importance of equity financing of business operations, based
on such variables as stock market capitalization relative to GDP , stock market liquidity, and changes in the number of listings
Bond market development: the importance of bond financing for businesses, based on variables such as
the value of private and public bonds relative to GDP and securitized asset issuance relative to GDP
Alternative sources of capital: the level of usage of diverse financing sources, such as venture
capital, credit cards, and non-public stock offerings or other private placements.
International funding: the availability of foreign capital to businesses in a particular country, based
on such variables as the volatility of exchange rates, international reserve holdings, portfolio and foreign direct investment, capital inflows and outflows, and sovereign ratings. To calculate component scores, first the non-surveyed or missing variables in the FI, EM, BM, AC, and IF components are assigned a score of zero. This step reflects the fact that the variable in question is so small that its effect on capital access is immaterial. For some countries, non-surveyed variables are missing due to slow data reporting but exist for prior years. In these cases, the prior years values are used for the current year rather than assigning a score of zero. Second, the variables are ranked by decile according to the directional relationship to capital access. The resulting scores of one to 10 are then assigned for countries ranking lowest to highest in terms of capital access. The score for each subcategory is calculated by a simple average of the variables, but only if the data in the category are greater than or equal to 50 percent of the total variables in that category. Third, the Capital Access Index is calculated using the weighted average of the seven components. The first two components, ME and IE, are weighted 25 percent each. The other five components, FI, EM, BM, AC, and IF, are each weighted as 10 percent of the final CAI score. Theoretically, the scores can range from zero to 10. However, because every country has some kind of macroeconomic and institutional structure, the minimum for each of these two categories is one; therefore the lowest possible score is 0.5.
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Component
Macro environment Macro environment Macro environment Macro environment Macro environment Macro environment Economic institution Economic institution Economic institution Economic institution Economic institution Economic institution Economic institution Economic institution Economic institution Economic institution Economic institution Economic institution Economic institution Economic institution Economic institution Economic institution Economic institution Bank Bank Bank Bank Bank Bank Bank Bank Bank Bank Equity market development Equity market development Equity market development Equity market development Equity market development Equity market development Bond market development Bond market development Bond market development Bond market development Bond market development Alternative sources of capital Alternative sources of capital Alternative sources of capital Alternative sources of capital International funding International funding International funding International funding International funding International funding International funding International funding
Variable
Absolute inflation rate Lending rate The absolute value of difference between interest rate volatility and the volatility of the International Monetary Funds SDR (special drawing right) and LIBOR (London Interbank Offered Rate) Corporate tax Personal tax Financial market sophistication Contract enforcement (procedures, days, and costs) Absence of corruption Registering property (procedures, days, and costs) Minimum paid in capital/ GNI (gross national income) Cost to create and register collateral Index of legal rights of borrowers and lenders Index of credit information availability Coverage of public registries Disclosure requirements Bankruptcy (procedure and costs) Bankruptcy recovery rate per dollar Effectiveness of bankruptcy law Judicial independence Efficiency of legal framework Property rights Intellectual property protection Burden of local government regulation Claims to non-financial firms/GDP Bank assets/GDP Domestic assets/foreign assets Moodys deposit rating Net interest margin Syndicated loans/GDP Actual reserves/ bank assets Soundness of banks Access to credit Ease of access to loans Equity market cap/GDP Equity market liquidity (turnover ratio) Relative equity market volatility (standard deviation of 12-month daily returns) Change in number of listings Local equity market access Regulation of securities exchange Private-sector bond/GDP Public-sector bond/GDP Private-sector bond/public-sector bond % Change in number of issuance Securitized bond issuance/GDP Venture capital funds/GDP Private placements/GDP Credit card issuance/GDP Venture capital availability Total international reserves/annual imports Relative currency volatility Portfolio inflow/GDP Portfolio outflow/GDP Direct investment inflow/GDP Direct investment outflow/GDP Fitch ratings S&P ratings
Source
IFS IFS IFS Heritage Heritage WEF WBD ICRG WBD WBD WBD WBD WBD WBD WBD WBD WBD WEF WEF WEF WEF WEF WEF IFS IFS IFS Moodys IFS SDC, IFS IFS WEF WEF WEF GMFB GMFB Datastream GMFB WEF WEF BIS, IFS BIS, IFS BIS BIS SDC, IFS SDC, IFS SDC, IFS NIL WEF IFS Datastream IFS IFS IFS IFS Fitch S&P
+ + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + +
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Notes: IFS: International Financial Statistics; Heritage: The 2007 Index of Economic Freedom; WEF: World Economic Forum, The Global Competitiveness Report, various issues; WBD: The World Bank Group Doing Business Database http://www.doingbusiness.org ; ICRG: International Country Risk Guide; Moodys: Moodys Ratings; SDC: Thomson Financial SDC Platinum; GMFB: S&P Global Stock Markets Factbook; BIS: Bank of International Settlements, BIS quarterly review; Datastream: Thomson Datastream; NIL: The Nilson Report, various issues; Fitch: Fitch Ratings; S&P: Standard & Poors Ratings
Directional relationship
MEAN: 6.01
10
RANK 59 63 63 65 65 67 67 69 69 71 71 71 74 74 74 74 74 74 74 81 81 81 81 81 81 81 81 81 81 91 91 93 93 95 96 97 98 99 100 100 100 100 100 105 105 105 105 109 110 110 112 113 114 115 115 115 115 119 119 121 122
COUNTRY Yemen South Africa India Iran Papua New Guinea Armenia Bolivia Ghana Cambodia Indonesia Botswana Guatemala Brazil Colombia Costa Rica Ukraine Nigeria Moldova Paraguay Peru Morocco Jamaica Namibia Kenya Honduras Dominican Republic Tanzania Senegal Syria Nicaragua Lesotho Sierra Leone Central African Republic Burkina Faso Cameroon Mongolia Rwanda Bangladesh Venezuela Uganda Mozambique Mauritania Republic of Congo Vietnam Argentina Malawi Madagascar Haiti Pakistan Benin Togo Sri Lanka Laos Zambia Guinea Chad Niger Ethiopia Mali Burundi Zimbabwe
ME 6.00 5.83 5.83 5.80 5.80 5.67 5.67 5.50 5.50 5.33 5.33 5.33 5.17 5.17 5.17 5.17 5.17 5.17 5.17 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 4.83 4.83 4.80 4.80 4.75 4.67 4.50 4.20 4.17 4.00 4.00 4.00 4.00 4.00 3.83 3.83 3.83 3.83 3.80 3.75 3.75 3.67 3.50 3.40 3.33 3.33 3.33 3.33 3.25 3.25 3.00 2.17
MEAN: 6.01
10
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MEAN: 5.36
10
RANK 62 63 64 65 65 65 68 69 70 71 72 73 74 74 74 74 78 79 80 80 82 83 84 85 86 87 87 87 90 91 92 93 94 95 96 97 98 99 99 101 102 102 104 104 106 106 106 109 110 110 112 113 114 115 115 117 118 119 120 121 122
COUNTRY Moldova Lebanon Mexico Panama Vietnam Guatemala Rwanda Honduras Pakistan India Mongolia Jamaica Brazil Indonesia Ghana Argentina Macedonia Czech Republic Poland Russia Tanzania Kenya Dominican Republic Ethiopia Syria Croatia Malawi Paraguay Mali Nigeria Senegal Lesotho Burkina Faso Nicaragua Ecuador Uganda Mauritania Papua New Guinea Guinea Bolivia Bosnia and Herzegovina Mozambique Philippines Zimbabwe Angola Togo Niger Madagascar Ukraine Bangladesh Benin Cameroon Cambodia Laos Central African Republic Sierra Leone Republic of Congo Venezuela Chad Burundi Haiti
IE 5.19 5.18 5.18 5.12 5.12 5.12 4.89 4.88 4.82 4.76 4.75 4.71 4.65 4.65 4.65 4.65 4.63 4.59 4.47 4.47 4.38 4.35 4.25 4.24 4.13 4.12 4.12 4.12 4.00 3.94 3.94 3.93 3.88 3.82 3.76 3.71 3.67 3.64 3.64 3.53 3.50 3.50 3.29 3.29 3.27 3.27 3.27 3.25 3.24 3.24 3.20 3.19 3.14 3.00 3.00 2.82 2.55 2.35 2.33 2.21 2.09
MEAN: 5.36
10
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Appendix B.3: Financial and Banking Institutions (FI) FI measures the level of involvement of deposit-taking institutions in financing businesses.
RANK 1 2 3 4 5 6 6 8 9 10 10 12 12 12 12 16 16 18 19 19 19 19 19 24 24 24 27 28 28 30 31 32 32 34 35 36 37 37 37 37 37 42 42 42 45 46 46 46 46 50 50 52 53 53 53 53 53 53 53 60 60 COUNTRY New Zealand Canada Australia Netherlands Hong Kong SAR Singapore United States Switzerland Denmark Spain Panama United Kingdom Portugal Japan Slovenia Sweden Chile Estonia Finland South Korea Ireland Malaysia South Africa Belgium Israel Kuwait France United Arab Emirates Lithuania Thailand Jordan Taiwan, China Slovakia Germany Hungary Latvia Austria Italy Czech Republic Greece Namibia Colombia Bulgaria Croatia Vietnam Oman India Tunisia Brazil China Romania Costa Rica Norway Mexico Indonesia Belarus Ukraine Honduras Mongolia Saudi Arabia Peru FI 8.70 8.60 8.20 8.10 7.90 7.80 7.80 7.60 7.50 7.30 7.30 7.10 7.10 7.10 7.10 7.00 7.00 6.80 6.70 6.70 6.70 6.70 6.70 6.60 6.60 6.60 6.50 6.40 6.40 6.30 6.20 6.10 6.10 6.00 5.90 5.80 5.50 5.50 5.50 5.50 5.50 5.30 5.30 5.30 5.20 5.10 5.10 5.10 5.10 5.00 5.00 4.80 4.60 4.60 4.60 4.60 4.60 4.60 4.60 4.50 4.50
MEAN: 4.54
10
RANK 62 62 62 65 66 66 66 69 69 69 72 72 72 75 75 75 78 78 78 81 81 83 84 84 84 87 87 89 89 89 89 93 94 94 96 96 98 98 100 101 101 101 101 101 106 106 108 109 109 111 112 113 113 115 116 117 117 119 119 121 122
COUNTRY Egypt Morocco Sri Lanka Russia Poland Turkey Ghana Macedonia Guatemala Bangladesh Pakistan Moldova Zimbabwe Botswana Kenya Bosnia and Herzegovina Philippines Jamaica Nigeria El Salvador Venezuela Tanzania Lebanon Papua New Guinea Nicaragua Zambia Malawi Argentina Armenia Senegal Mozambique Dominican Republic Bolivia Ethiopia Angola Uganda Lesotho Central African Republic Iran Uruguay Paraguay Cambodia Burkina Faso Mali Benin Republic of Congo Laos Cameroon Madagascar Burundi Sierra Leone Togo Chad Niger Haiti Ecuador Mauritania Syria Guinea Rwanda Yemen
FI 4.40 4.40 4.40 4.30 4.20 4.20 4.20 4.00 4.00 4.00 3.90 3.90 3.90 3.80 3.80 3.80 3.70 3.70 3.70 3.50 3.50 3.40 3.30 3.30 3.30 3.10 3.10 2.90 2.90 2.90 2.90 2.80 2.70 2.70 2.50 2.50 2.40 2.40 2.30 2.20 2.20 2.20 2.20 2.20 2.10 2.10 2.00 1.80 1.80 1.70 1.60 1.50 1.50 1.20 1.10 0.70 0.70 0.60 0.60 0.50 0.20
MEAN: 4.45
10
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Appendix B.4: Equity Market Development (EM) EM reflects the importance of equity markets for business financing.
RANK 1 2 3 4 5 5 7 7 7 10 11 11 13 14 14 14 17 17 17 17 21 21 23 23 23 23 23 28 28 30 30 30 33 33 33 33 33 38 38 40 40 42 42 42 42 42 47 47 47 50 50 50 50 54 54 54 57 57 57 60 60 COUNTRY Sweden United States Taiwan, China Jordan Australia South Africa Denmark South Korea France Switzerland Chile Kuwait United Kingdom Hong Kong SAR Malaysia India Norway Belgium Spain Thailand Canada Germany Netherlands Portugal New Zealand Israel Morocco Singapore Japan Finland Oman Indonesia Estonia United Arab Emirates Philippines Kenya Bangladesh Saudi Arabia Poland Sri Lanka Pakistan Italy Lithuania Panama Colombia Peru China Mexico Tunisia Ireland Brazil Croatia Malawi Greece Egypt Nigeria Austria Vietnam Zimbabwe Hungary Ghana EM 8.33 7.83 7.67 7.50 7.33 7.33 7.17 7.17 7.17 7.00 6.83 6.83 6.67 6.50 6.50 6.50 6.33 6.33 6.33 6.33 6.17 6.17 6.00 6.00 6.00 6.00 6.00 5.83 5.83 5.67 5.67 5.67 5.50 5.50 5.50 5.50 5.50 5.33 5.33 5.17 5.17 5.00 5.00 5.00 5.00 5.00 4.83 4.83 4.83 4.67 4.67 4.67 4.67 4.50 4.50 4.50 4.33 4.33 4.33 4.00 4.00
MEAN: 3.55
10
RANK 62 62 62 65 65 67 67 69 69 69 69 69 74 75 76 76 78 79 79 81 82 82 84 84 86 86 86 89 90 91 91 91 91 95 96 96 96 96 96 96 96 96 96 96 96 96 96 96 96 111 111 111 111 111 111 111 111 111 111 111 111
COUNTRY Slovenia Ecuador Zambia Turkey Botswana Czech Republic Lebanon Slovakia Russia Jamaica Argentina Venezuela Latvia El Salvador Bulgaria Mongolia Macedonia Romania Iran Namibia Costa Rica Tanzania Bolivia Papua New Guinea Uruguay Ukraine Paraguay Uganda Armenia Guatemala Bosnia and Herzegovina Nicaragua Burkina Faso Benin Honduras Moldova Dominican Republic Cambodia Lesotho Senegal Mozambique Cameroon Syria Ethiopia Mali Mauritania Madagascar Chad Burundi Belarus Angola Yemen Rwanda Sierra Leone Laos Central African Republic Togo Guinea Republic of Congo Niger Haiti
EM 3.83 3.83 3.83 3.67 3.67 3.50 3.50 3.17 3.17 3.17 3.17 3.17 3.00 2.83 2.50 2.50 2.33 2.17 2.17 2.00 1.83 1.83 1.67 1.67 1.17 1.17 1.17 1.00 0.83 0.67 0.67 0.67 0.67 0.50 0.33 0.33 0.33 0.33 0.33 0.33 0.33 0.33 0.33 0.33 0.33 0.33 0.33 0.33 0.33 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
0 MEAN: 3.755
10
20
Appendix B.5: Bond Market Development (BM) BM captures the importance of bond financing for businesses.
RANK 1 2 2 2 5 5 5 5 5 5 11 11 13 13 13 13 13 13 19 19 19 19 23 23 23 23 27 27 29 29 31 31 33 33 33 33 33 33 33 40 40 40 40 44 45 45 45 48 48 48 48 48 48 48 48 48 48 58 58 58 58 COUNTRY United Kingdom Ireland Italy Netherlands Austria Belgium Canada France Portugal United States Norway Spain Chile Denmark Finland Malaysia Sweden Zimbabwe Brazil Germany Greece South Korea Australia Philippines Singapore Switzerland China Hungary Lebanon United Arab Emirates South Africa Thailand Czech Republic Estonia Hong Kong SAR India Japan Mexico Russia Jamaica Poland Taiwan, China Venezuela Turkey Pakistan Panama Ukraine Argentina Colombia Costa Rica Dominican Republic Indonesia Israel Macedonia Peru Slovakia Slovenia Bulgaria New Zealand Oman Uganda BM 8.25 8.00 8.00 8.00 7.75 7.75 7.75 7.75 7.75 7.75 7.50 7.50 7.25 7.25 7.25 7.25 7.25 7.25 7.00 7.00 7.00 7.00 6.25 6.25 6.25 6.25 6.00 6.00 5.75 5.75 5.50 5.50 5.25 5.25 5.25 5.25 5.25 5.25 5.25 5.00 5.00 5.00 5.00 4.75 4.25 4.25 4.25 4.00 4.00 4.00 4.00 4.00 4.00 4.00 4.00 4.00 4.00 3.75 3.75 3.75 3.75
0 MEAN: 3.66
10
RANK 62 62 62 62 66 67 67 69 69 69 69 69 69 69 76 76 78 78 78 78 82 82 82 85 85 85 85 89 90 90 90 90 90 90 90 90 90 90 90 90 90 90 90 90 90 107 107 107 107 107 107 107 107 107 107 107 107 107 107 107 107
COUNTRY Bangladesh Benin Croatia Egypt Angola Laos Lithuania Belarus Chad El Salvador Ghana Latvia Romania Uruguay Saudi Arabia Sri Lanka Guatemala Iran Tunisia Vietnam Bolivia Ecuador Morocco Cameroon Jordan Kuwait Papua New Guinea Moldova Guinea Haiti Kenya Lesotho Malawi Mali Mozambique Namibia Nicaragua Niger Nigeria Paraguay Republic of Congo Senegal Tanzania Yemen Zambia Armenia Bosnia and Herzegovina Botswana Burkina Faso Burundi Cambodia Central African Republic Ethiopia Honduras Madagascar Mauritania Mongolia Rwanda Sierra Leone Syria Togo
BM 3.50 3.50 3.50 3.50 3.25 3.00 3.00 2.75 2.75 2.75 2.75 2.75 2.75 2.75 2.50 2.50 2.25 2.25 2.25 2.25 2.00 2.00 2.00 1.75 1.75 1.75 1.75 1.50 1.25 1.25 1.25 1.25 1.25 1.25 1.25 1.25 1.25 1.25 1.25 1.25 1.25 1.25 1.25 1.25 1.25 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
0 MEAN: 3.66
10
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Appendix B.6: Alternative Sources of Capital (AC) AC measures the use of alternative financing tools such as venture capital, private placements, and credit cards.
RANK 1 2 3 3 3 6 7 7 9 9 11 11 11 14 14 16 16 18 18 18 18 22 22 24 25 25 25 25 29 29 29 32 32 34 34 34 34 34 34 34 34 34 43 44 44 44 47 47 47 47 47 47 53 53 53 53 53 58 58 58 58 COUNTRY United Kingdom Sweden Canada United States Australia South Korea Hong Kong SAR Israel Ireland France Switzerland Finland Norway United Arab Emirates Spain Netherlands Portugal Denmark New Zealand Belgium India Singapore Estonia South Africa Germany Thailand Kuwait Brazil Taiwan, China China Greece Japan Mexico Malaysia Austria Italy Saudi Arabia Czech Republic Egypt Poland Russia Peru Vietnam Lithuania Latvia Philippines Panama Jordan Turkey Colombia Costa Rica Uruguay Hungary Croatia Kenya Ukraine Zimbabwe Chile Lebanon Slovenia Tunisia AC 9.00 8.75 8.50 8.50 8.50 8.25 7.75 7.75 7.50 7.50 7.00 7.00 7.00 6.75 6.75 6.50 6.50 6.25 6.25 6.25 6.25 6.00 6.00 5.75 5.25 5.25 5.25 5.25 4.75 4.75 4.75 4.50 4.50 4.25 4.25 4.25 4.25 4.25 4.25 4.25 4.25 4.25 4.00 3.75 3.75 3.75 3.50 3.50 3.50 3.50 3.50 3.50 3.25 3.25 3.25 3.25 3.25 3.00 3.00 3.00 3.00
0 MEAN: 3.10
10
RANK 58 58 64 64 64 64 68 68 70 70 72 72 74 74 74 74 78 78 78 78 82 82 84 84 86 86 86 86 86 91 91 91 91 91 91 91 91 99 99 99 99 99 99 99 99 99 99 99 99 99 99 99 114 114 114 114 114 114 114 114 114
COUNTRY Morocco Argentina Oman Romania Macedonia Indonesia Jamaica Venezuela Bulgaria Togo Sri Lanka Honduras Slovakia El Salvador Botswana Pakistan Guatemala Dominican Republic Nicaragua Sierra Leone Nigeria Zambia Namibia Cambodia Ecuador Bangladesh Uganda Lesotho Syria Bosnia and Herzegovina Tanzania Bolivia Papua New Guinea Mozambique Benin Madagascar Burundi Ghana Iran Armenia Moldova Angola Mongolia Malawi Paraguay Senegal Cameroon Burkina Faso Ethiopia Mali Mauritania Chad Belarus Yemen Rwanda Laos Central African Republic Guinea Republic of Congo Niger Haiti
AC 3.00 3.00 2.75 2.75 2.75 2.75 2.50 2.50 2.25 2.25 2.00 2.00 1.75 1.75 1.75 1.75 1.50 1.50 1.50 1.50 1.25 1.25 1.00 1.00 0.75 0.75 0.75 0.75 0.75 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
0 MEAN: 3.10
10
22
Appendix B.7: International Funding (IF) IF measures the level of foreign capital available to businesses in a country.
RANK 1 1 3 3 5 6 6 6 9 10 11 12 12 14 14 16 17 17 19 19 21 22 22 22 25 25 25 28 28 30 31 32 32 34 34 34 37 37 37 40 40 40 43 43 43 43 43 43 49 49 51 51 53 53 55 55 57 57 57 60 61 COUNTRY Hong Kong SAR Switzerland Singapore Israel Denmark Sweden Norway France United Kingdom United States Kuwait Canada Belgium Australia Netherlands Portugal Ireland Thailand Malaysia Taiwan, China Finland Spain Hungary Lebanon Estonia Chile India Austria China South Korea Germany Saudi Arabia Egypt Japan Czech Republic Russia New Zealand United Arab Emirates Panama Slovenia Croatia Morocco Jordan Tunisia Brazil Bulgaria Peru Jamaica Greece Latvia Italy Oman Mexico Vietnam South Africa Lithuania Colombia Uruguay Argentina Poland Romania IF 7.42 7.42 7.33 7.33 7.25 7.17 7.17 7.17 6.92 6.83 6.67 6.58 6.58 6.50 6.50 6.08 5.92 5.92 5.75 5.75 5.67 5.58 5.58 5.58 5.50 5.50 5.50 5.42 5.42 5.36 5.33 5.25 5.25 5.17 5.17 5.17 5.00 5.00 5.00 4.92 4.92 4.92 4.83 4.83 4.83 4.83 4.83 4.83 4.67 4.67 4.58 4.58 4.50 4.50 4.25 4.25 4.17 4.17 4.17 4.08 4.00
MEAN: 4.08
10
RANK 61 63 64 65 65 67 67 67 70 70 72 73 74 75 76 76 78 78 78 81 82 82 82 82 82 87 88 89 89 91 91 93 94 95 96 97 97 99 100 100 102 103 104 105 105 107 108 108 110 110 112 113 113 113 113 117 117 119 120 121 122
COUNTRY Indonesia Cambodia Macedonia Slovakia Nigeria Turkey Philippines Costa Rica Honduras Mozambique Kenya Venezuela Nicaragua Sierra Leone El Salvador Sri Lanka Guatemala Ukraine Moldova Armenia Botswana Tanzania Bolivia Rwanda Burundi Bosnia and Herzegovina Uganda Dominican Republic Cameroon Ghana Angola Pakistan Laos Guinea Zambia Belarus Bangladesh Zimbabwe Ethiopia Haiti Namibia Paraguay Lesotho Togo Republic of Congo Benin Ecuador Papua New Guinea Burkina Faso Chad Mali Iran Mongolia Syria Mauritania Senegal Niger Malawi Central African Republic Madagascar Yemen
IF 4.00 3.92 3.91 3.83 3.83 3.75 3.75 3.75 3.67 3.67 3.58 3.55 3.50 3.45 3.42 3.42 3.33 3.33 3.33 3.25 3.17 3.17 3.17 3.17 3.17 3.09 3.08 2.92 2.92 2.82 2.82 2.75 2.67 2.64 2.58 2.50 2.50 2.45 2.42 2.42 2.33 2.25 2.09 2.00 2.00 1.83 1.75 1.75 1.58 1.58 1.50 1.36 1.36 1.36 1.36 1.33 1.33 1.27 1.25 1.00 0.36
MEAN: 4.08
10
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