The relationship between finance and growth has been long debated in academic research, and there
has been ample evidence that a well-functioning financial system contributes positively to a country's
economic growth (see, e.g., Demirgüç-Kunt and Levine (2008) for an extensive survey of the literature). At
the micro-economic level, an important channel for the financial systems to facilitate economic growth is
to efficiently coordinate financing and investment activities across firms, to the effect that capital flows
from firms with low investment opportunities to firms with highly profitable prospects.