Bank for International Settlements (BIS) ... Financial Dependence and Growth. option. The relationships among competition in the financial sector, access of firms to external financing, and associated economic growth are ambiguous in theory. Does finance affect economic growth? Specifically, we ask whether industrial sectors that are relatively more in need of external finance develop disproportionately faster in countries with more-developed financial markets. JSTOR®, the JSTOR logo, JPASS®, Artstor®, Reveal Digital™ and ITHAKA® are registered trademarks of ITHAKA. Does finance affect economic growth? Introduction The global financial crisis has deeply affected the growth and finance nexus via several channels, including wide-scale private deleveraging, tighter credit constraints for some economic agents, e.g. As has been noted elsewhere, the observed correlation does not necessarily imply a causal relationship. In this paper we show that more efficient banks are particularly important in stimulating both output and productivity growth, while traditional volume measures of finance are much less important for productivity growth. Does finance affect economic growth? Once composed primarily of college and university professors in economics, the American Economic Association (AEA) now attracts 20,000+ members from academe, business, government, and consulting groups within diverse disciplines from multi-cultural backgrounds. Financial Dependence, Banking Sector Competition, and Economic Growth. CiteSeerX - Document Details (Isaac Councill, Lee Giles, Pradeep Teregowda): This paper examines whether nancial development facilitates economic growth by scrutinizing one rationale for such a relationship; that nancial development reduces the costs of external nance to rms. As has been noted elsewhere, the observed correlation does not necessarily imply a causal relationship. This paper examines whether nancial development facilitates economic growth by scrutinizing one rationale for such a relationship; that nancial development reduces the costs of external nance to rms. Banking Market Structure, Financial Dependence and Growth: International Evidence from Industry Data. CiteSeerX - Document Details (Isaac Councill, Lee Giles, Pradeep Teregowda): This paper examines whether financial development facilitates economic growth by scrutinizing one rationale for such a relationship; that financial development reduces the costs of external finance to firms. As has been noted elsewhere, the observed correlation does not necessarily imply a causal relationship. This paper provides evidence that bank concentration promotes the growth of those industrial sectors that are more in need of external finance by facilitating credit access to younger firms. We show this result is unlikely to be driven by omitted variables, outliers, or reverse causality. Chakraborty, Atreya and Charles X. Hu (2006): “Lending relationships in line-of-credit and nonline-of-credit loans: evidence from collateral use in small business”, Journal of Financial Intermediation, forthcoming. 2 * APRIL 2001 Banking Market Structure, Financial Dependence and Growth: International Evidence from Industry Data NICOLA CETORELLI and MICHELE GAMBERA* ABSTERACT This paper explores the empirical relevance of banking market structure on growth. Abstract. In this paper we first estimate for 16 countries an industrial organization-based measure of banking system competition. Select the purchase This paper examines whether financial development facilitates economic growth by scrutinizing one rationale for such a relationship: that financial development reduces the costs of external finance to firms. Search for more papers by this author. Cetorelli is at the Federal Reserve Bank of Chicago and Gambera is at Morningstar, Inc. 2001;56(2):617–48. The role of the financial sector in economic growth, The dynamics of finance-growth nexus in advanced economies, Is the Relationship between Financial Development and Economic Growth Monotonic? Financial development stimulates growth, in particular in industries dependent on external finance. Article citations. By Raghuram G. Rajan and Luigi Zingales. 2003). The law and finance literature has found that financial markets are better developed in countries with strong legal frameworks (La Porta et al. A number of studies have identified a positive correlation between the level of development of a country's financial sector and the rate of growth of its per capita income. Financial Dependence and Growth By RAGHURAM G. RAJAN AND LUIGI ZINGALES * This paper examines whetherfinancial development facilitates economic growth by scrutinizing one rationale for such a relationship: that financial development reduces the costs of … As has been noted elsewhere, the observed correlation does not necessarily imply a causal relationship. Evidence from a Sample of Middle Income Countries, Does too much finance harm economic growth, The nonlinear relationship between economic growth and financial development: Evidence from developing, emerging and advanced economies, The financial sector and economic growth in a panel of countries, Financial Development and Economic Growth: A Meta-Analysis, DOES FINANCIAL MARKET DEVELOPMENT MATTER IN EXPLAINING GROWTH FLUCTUATIONS, Financial Development, Growth, and the Distribution of Income, Finance and Growth: Schumpeter Might Be Right, Financial markets and growth: An overview☆, The Finance-Growth Nexus: Evidence from Bank Branch Deregulation, A Sensitivity Analysis of Cross-Country Growth Regressions, The Coevolution of the Real and Financial Sectors in the Growth Process, Good Policy or Good Luck? and Zingales, L. (1998) Financial Dependence and Growth. This paper examines whether financial development facilitates economic growth by scrutinizing one rationale for such a relationship; that financial development reduces the costs of…. The American Economic Review, 88, 559-586. has been cited by the following article: TITLE: Can the Construction of Social Credit System Alleviate the Influence of Financing Constraints on the Growth of Enterprises? The views ex-pressed in this paper are those of the authors and do not necessarily … The threshold of the ratio between private credit and GDP above which the contribution of a further expansion of credit to industry growth is negative depends on the degree of industries’ own and upstream financial dependence values and slightly varies across sectors, ranging from 89% to 87%, with higher thresholds observed for sectors with lower own financial dependence but higher upstream … This paper examines whether financial development facilitates economic growth by scrutinizing one rationale for such a relationship: that financial development reduces the costs of … We widen the understanding of the finance-growth nexus by accounting for the indirect effect of financial development through input-output (IO) linkages in determining the growth of industries across countries. Michele Gambera. A number of studies have identified a positive correlation between the level of development of a country's financial sector and the rate of growth of its per capita income. The Journal of Finance. As has been noted elsewhere, the observed correlation does not necessarily imply a causal relationship. Semantic Scholar is a free, AI-powered research tool for scientific literature, based at the Allen Institute for AI. This still suggests an important role for finance in the allocation of resources, but shifts the emphasis from "financial dependence" to "global growth opportunities." 3481. 88, issue 3, 559-86 Abstract: This paper examines whether financial development facilitates economic growth by scrutinizing one rationale for such a relationship: that financial development reduces the costs of external finance to firms. Industry Data card or bank account with are better developed in countries with strong legal frameworks ( La et. 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