Browsing by Author "Ngalim, Lawrence"

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Colonialism in Sub-Saharan Africa, Access To Finance, and Firm Growth
(Elsevier, 2025) Ngalim, Lawrence; Togan, Asli
Whether adequate access to external finance matters for firm-growth remains an unsettled debate in the finance literature, mainly because of endogeneity concerns. In this paper, we approach these concerns with two instruments constructed from colonial history that plausibly explain the current variations in financial development across sub-Saharan African (SSA) economies. We conjecture that these instruments-- the firm's distance from a colonial railway station and whether it is located in an area that had colonial settlements-provide potential channels of impact that identify the present-day effects of access to finance on firm-growth across SSA. By using these instruments, empirical results underscore the primacy of access to finance in firmgrowth and consistently suggest that firms with access to finance are more likely to experience higher revenue growth and asset growth. Overall, our results are consistent and robust to alternative specifications and highlight the importance of access to finance for firms. Our findings provide policy implications on the development of the banking sector as well as private sector development.
The Private Equity Industry in Africa: Firm Survival and Growth
(Routledge Journals, Taylor & Francis Ltd, 2025) Ngalim, Lawrence; Togan, Asli
The availability of Private Equity (PE) in Africa is quite limited. And even though the literature documents that in other parts of the world, this type of financing can relieve entrepreneurial firms' financial constraints and likely benefit employment and firm growth, little is known about the effect of PE on firms operating in Sub-Saharan Africa (SSA). This paper describes the landscape of PE in this region and analyzes whether private equity helps firms survive and grow. The results reveal that recipients of external financing from PE firms have a higher probability of survival than non-recipients, and such financing strongly correlates with proxies for firm growth. These results remain robust in a further attempt to alleviate endogeneity, using propensity score matching to estimate the difference in outcomes between recipients and non-recipients. Our results suggest that PE is an essential source of external financing for SSA firms and that governments should create incentives for investors and entrepreneurs.