Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
5090425 | Journal of Banking & Finance | 2009 | 9 Pages |
Abstract
We explore one specific channel through which finance promotes growth: the allocation of capital. Using international industrial data, we find that countries with developed financial markets invest more in growing industries, and pull out more funds of declining ones. Most interestingly, this pattern is more eminent for those industries more dependent on external financing. Various robustness checks show that the results are not driven by reverse causality, omitted variables, specific countries or industries.
Related Topics
Social Sciences and Humanities
Economics, Econometrics and Finance
Economics and Econometrics
Authors
Jiaren Pang, Haibin Wu,