Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/104840
Authors: 
Arnold, Lutz G.
Walz, Uwe
Year of Publication: 
1998
Series/Report no.: 
Tübinger Diskussionsbeiträge 134
Abstract: 
We develop a growth model with endogenous technological progress in which the financial sector plays an explicit role. Thereby we discuss the role of different financial regimes in the growth process. We contrast a bank-dominated financial system with a market-dominated system. In the first one a financial intermediary (a bank) is able to solve informational problems, however, at a cost. There is learning by doing in the banking sector. We ask for circumstances under which one of the two regimes emerges. We show that history matters and that the emergence of the low-growth regime is feasible. Furthermore, in a second step we allow for an endogenous capital structure choice of firms and analyze the evolution of the financial system and capital structure over time.
Subjects: 
Innovation
growth
financial regimes
capital structure
JEL: 
G20
O31
O41
Document Type: 
Working Paper

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