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Going through the hoops with the support of the financial system: The Story of Jan Sarkis

Martin Melecky's picture

The following post is a part of a series that discusses 'managing risk for development,' the theme of the World Bank’s upcoming World Development Report 2014.

A composite story based on prevailing business practices

In January 1990 after the Velvet Revolution, Jan Sarkis, the son of a Greek immigrant in rural Czech Republic, decides to start a business to produce bottled juices. To obtain needed machinery and funds for working capital (fruits, containers, bottles, etc.), Jan takes credit from a local bank. He had heard from the locals that the region used to experience periodic floods. Although Jan hasn’t experienced any himself, he still buys flood insurance from a reputable insurance company.  In the 90s, rural Czech Republic was prone to thefts and burglary. So, Jan decides to protect his savings by depositing them in a bank. Good times settle in Czekia, and Jan’s business and the country begin to boom.

Market Access: A Key Determinant of Economic Development in Sub-Saharan Africa

Harry Garretsen's picture

Sub-Saharan Africa (SSA) is home to the world’s poorest countries. The region’s geographical disadvantages are often viewed as an important deterrent to its economic development. A country’s geography directly affects economic development through its effect on disease burden, agricultural productivity or the availability of natural resources. However, the new economic geography (NEG) literature, initiated by Krugman (1991), highlights another mechanism through which geography affects prosperity.

Impact of the Financial Crisis on New Firm Registration

Leora Klapper's picture

As reports of sluggish global job creation continue, some look to new firms as a source of net job creation (Haltiwanger, 2011). But the lead article of this month’s Economics Letters, citing panel data from 93 countries, shows that most countries experienced a sharp drop in new firm registration during the financial crisis. As discussed in an earlier blog, relatively larger contractions are seen in countries with more developed financial markets and where entrepreneurs depend more on banks for start-up capital.