SSE/EFI Working Paper Series in Economics and Finance
International Financial Liberalization and Industry Growth
() and Daniel Waldenström
Abstract: The growth effects of international financial
liberalization and integration are investigated using the methodology and
data developed by Rajan and Zingales (1998). The main result is that
industries highly dependent on external financing do not experience higher
growth in value added in countries with liberalized financial markets.
Liberalization does, however, increase the growth rates of both production
and firm creation among externally dependent industries – given that
countries have reached a relatively high level of financial development.
These results are consistent both with increased competition and increased
outsourcing. Some preliminary evidence point towards the latter
Keywords: Financial liberalization; Financial integration; Economic growth; (follow links to similar papers)
JEL-Codes: F30; G10; O40; (follow links to similar papers)
38 pages, November 14, 2002
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