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Inefficiencies in the fiscal and monetary systems of the Ottoman Empire led to a higher debt burden over time and the bankruptcy for the Ottoman state in 1875. To deal with these inefficiencies, reforms were implemented: supervisory organizations were established and the gold standard was adopted. How did investors at the Istanbul Bourse view these reforms? We manually collected data on the price of Ottoman government bonds on the Bourse from 1873 to 1883. Using the generalized autoregressive conditional heteroscedasticity (GARCH) methodology, we identify short-run and permanent changes in volatility of bond returns subsequent to the reforms. Our results suggest investors responded positively, by accepting lower yield premia, to adoption of the gold standard, and foundation of the Ottoman Public Debt Administration which had European sponsors, but did not respond positively to reforms that relied on purely local institutions.

The aim of this chapter is to understand effects of the recent crisis on the financial constraints that small and medium size enterprises have experienced in emerging economies. Using the firm level survey data provided by the World Bank, a descriptive analysis is conducted by calculating the average of the financial obstacles that the firms had experienced before and after the crisis, and the existence of statistical difference between the two periods is tested. The results indicate that the small and medium size enterprises suffer more from financial constraints relative to large firms. Financial constraints that the small and medium size firms had experienced are largely affected by the recent global financial crisis, relative to the large firms. However, effects of the financial constraints on real variables such as investment, innovation, and research and development expenditures cannot be examined due to data limitations. This chapter contributes to the limited literature of financial constraints experienced by the small and medium enterprises in emerging economies by taking the effect of the recent global financial crisis into account. The novelty of this chapter comes from the dataset: “The World Bank’s World Business Environment Surveys,” which provides a large sample of emerging countries.