Small Firm Investment Under Uncertainty: The Role of Equity Finance
Organized by the Private Sector Development Research Network
Hosted by EBRD
Moderated by Michelle Brock, Senior Research Economist, EBRD
Friday, 22nd November from 9-10am EST / 2-3pm London Time
LINK TO JOIN WILL BE POSTED HERE SOON
ABOUT THE SEMINAR
Private enterprise development in low-income countries remains elusive, and the ineffectiveness of microcredit in stimulating small firm growth presents a challenge to the finance and development fields. By combining data from artefactual field experiments, two additional field experiments, and structural estimation, the study demonstrates that equity-like contracts promote more profitable investments. The research also uncovers a complex role for risk preferences: while loss-averse individuals prefer equity, a significant number of individuals who overvalue small probabilities favor debt. The findings show that equity-like contractual innovations, increasingly viable through FinTech advancements, can unlock investment in small firms.
ABOUT THE SPEAKER
Muhammad Meki
University of Oxford, Associate Professor, Department of International Development, and Associate Member, Department of Economics. Affiliate: J-PAL, CESifo.
Dr. Meki is an Associate Professor at the Department of International Development and an Associate Member of the Department of Economics at the University of Oxford. He is affiliated with the Abdul Latif Jameel Poverty Action Lab (J-PAL), CESifo, and the Centre for the Study of African Economies (CSAE). Dr. Meki also serves as the Investment Bursar at the Oxford Centre for Islamic Studies, managing the center’s endowment fund. He earned his PhD in Economics from the University of Oxford, completing further postgraduate studies in finance, economics, and development economics at LSE, Cambridge, and Oxford. Dr. Meki’s research explores the impact of equity-like financial contracts on the growth of small firms, with extensive fieldwork across Asia and Africa. Prior to academia, he worked in financial markets, trading bonds and derivatives for Bank of America in London and Deutsche Bank in Singapore.
Details of Dr. Meki’s work can be found here