|
on Financial Development and Growth |
| By: | Luintel, Kul B (Cardiff Business School); Khan, Mosahid; Arestis, Philip; Theodoridis, Konstantinos (Cardiff Business School) |
| Abstract: | Recent empirical work on financial structure and economic growth analyzes multicountry dataset in panel and/or cross-section frameworks and conclude that financial structure is irrelevant. We highlight their shortcomings and re-examine this issue utilizing a time series and a dynamic heterogeneous panel methods. Our sample consists of fourteen countries. Tests reveal that cross-country data cannot be pooled. Financial structure significantly explains output levels in most countries. The results are rigorously scrutinized through bootstrap exercises and they are robust to extensive sensitivity tests. We also test for several hypotheses about the prospective role of financial structure and financial development on economic growth. |
| Keywords: | Financial Structure; Economic Growth; Co-integration; Bootstrap; Dynamic Heterogeneous Panels |
| JEL: | O16 G18 G28 |
| Date: | 2008–01 |
| URL: | http://d.repec.org/n?u=RePEc:cdf:wpaper:2008/3&r=fdg |
| By: | Patrick Musso (University of Nice-Sophia Antipolis); Stefano Schiavo (Observatoire Français des Conjonctures Économiques) |
| Abstract: | We propose a new approach for identifying and measuring the degree of financial constraint faced by firms and use it to investigate the effect of financial constraints on firm survival and development. Using panel data on French manufacturing firms over the 1996-2004 period, we find that (i) financial constraints significantly increase the probability of exiting the market, (ii) access to external financial resources has a positive effect on the growth of firms in terms of sales, capital stock and employment, (iii) financial constraints are positively related with productivity growth in the short-run. We interpret this last result as the sign that constrained firms need to cut costs in order to generate the resources they cannot raise on financial markets. |
| Keywords: | Financial constraints; Firm growth; Firm survival |
| JEL: | E44 G32 L25 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:fce:doctra:0737&r=fdg |
| By: | Robert Pollin (Univ. of Massachusetts); Gerald Epstein (Univ. of Massachusetts); James Heintz (Univ. of Massachusetts) |
| Keywords: | Pro-Growth Alternatives for Monetary and Financial Policies in Sub-Saharan Africa |
| Date: | 2008–01 |
| URL: | http://d.repec.org/n?u=RePEc:ipc:pbrief:6&r=fdg |