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. Banking Market Structure, Financial Dependence and Growth: International Evidence from Industry Data Nicola Cetorelli1 Michele Gambera October 1999 1Federal Reserve Bank of Chicago, 230 S. LaSalle St., Chicago, IL 60604-1413.E-mail: ncetorelli@frbchi.org and Michele.Gambera@chi.frb.org, respectively. 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. 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. 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. Di Patti EB, Dell'Ariccia G. Bank competition and firm creation. 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. This item is part of JSTOR collection Home Policy Research Working Papers Financial Dependence, Banking Sector Competition, and Economic Growth. This still suggests an important role for finance in the allocation of resources, but shifts the emphasis from "financial dependence" to "global growth opportunities." The American Economic Review is a general-interest economics journal. Does finance affect economic growth? Does Inequality Matter in the Finance-Growth Nexus? 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. 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? 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. We analyze data from 19 developed and developing countries that have experienced financial crises during the last 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. More>> Rajan, R.G. 49 Pages Posted: 1 Feb 2005. Financial Crises, Financial Dependence, and Industry Growth Luc Laeven, Daniela Klingebiel, and Randy Kroszner** Abstract This paper investigates the linkage between financial crises and industry growth. Request Permissions. 3481. JSTOR is part of ITHAKA, a not-for-profit organization helping the academic community use digital technologies to preserve the scholarly record and to advance research and teaching in sustainable ways. Banking Market Structure, Financial Dependence and Growth: International Evidence from Industry Data. Does finance affect economic growth? 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 … 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? Financial development stimulates growth, in particular in industries dependent on external finance. As has been noted elsewhere, the observed correlation does not necessarily imply a causal relationship. Banking Market Structure, Financial Dependence and Growth: International Evidence from Industry Data. I. ©2000-2020 ITHAKA. 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. 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. 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 … Cetorelli is at the Federal Reserve Bank of Chicago and Gambera is at Morningstar, Inc. The journal publishes 11 issues containing articles on a broad range of topics. Does finance affect economic growth? JSTOR®, the JSTOR logo, JPASS®, Artstor®, Reveal Digital™ and ITHAKA® are registered trademarks of ITHAKA. See all articles by Stijn Claessens Stijn Claessens. 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. © 1998 American Economic Association We show this result is unlikely to be driven by omitted variables, outliers, or reverse causality. NBER WO~G PAPER SERIES FINANCIAL DEPENDENCE AND GROWTH Raghuram G. Rajan Luigi Zingales Working Paper 5758 NATIONAL BUREAU OF ECONOMIC Avenue MA 02138 1996 RESEARCH 1050 Massachusetts Cambridge, September We thank Gene Fama, Peter Klenow, David Scharfstein, Robert Vishny, University comments. 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 re-examine their assumptions, and the robustness of their results to alternative theories and interpretations. option. In this note, we revisit an earlier, highly influential paper on Financial Dependence and Growth by Rajan and Zingales (1998), by re-examining their assumptions, and the robustness of their results to alternative theories and interpretations. World Bank Policy Research Working Paper No. and Zingales, L. (1998) Financial Dependence and Growth. Read your article online and download the PDF from your email or your account. As has been noted elsewhere, the observed correlation does not necessarily imply a causal relationship. Financial Dependence and Growth: Diminishing Returns to Improvement in Financial Development Leilei Shen Kansas State University April 7, 2013 Abstract This paper examines how much nancial development facilitates economic growth by nonpara-metrically estimating the e ect of nancial development on reducing the costs of external nance to rms. No Access Policy Research Working Papers 21 Jun 2013. View Article Google Scholar 21. The law and finance literature has found that financial markets are better developed in countries with strong legal frameworks (La Porta et al. The American Economic Review 2003). 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. This paper examines whether financial development facilitates economic growth by scrutinizing one rationale for such a relationship; that financial development reduces the costs of…. FINANCIAL DEPENDENCE AND GROWTH ABSTRACT Does finance affect economic growth? Does finance affect economic growth? Moreover, measuring competition in the financial sector can be complex. 2001;56(2):617–48. All Rights Reserved. We find this to be true in a large sample of countries over the 1980's. We revisit an earlier, highly influential paper on financial dependence and growth by Rajan and Zingales (1998). The views ex-pressed in this paper are those of the authors and do not necessarily … In this paper we first estimate for 16 countries an industrial organization-based measure of banking system competition. Shyn, Yong-Sang.November, 2005.Financial dependence, growth opportunities, and industrial growth in Korea,Report,[Seoul]Korea Institute of Finance,31 Raghuram Rajan and Luigi Zingales () American Economic Review, 1998, vol. You are currently offline. Financial Dependence and Growth . 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? Financial Dependence and Growth. 1998; Beck et al. Abstract. 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. THE JOURNAL OF FINANCE * VOL. 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. Abstract. Search for more papers by this author. All are professionals or graduate-level students dedicated to economics research and teaching. Cetorelli N, Gambera M. Banking market structure, financial dependence and growth: International evidence from industry data. Allen Institute for AI variables, outliers, or reverse causality financial Dependence and:. Markets are better developed in countries with strong legal frameworks ( La Porta et.. 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