Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/51444
Authors: 
Arizala, Francisco
Cavallo, Eduardo
Galindo, Arturo
Year of Publication: 
2009
Series/Report no.: 
Working paper // Inter-American Development Bank, Research Department 682
Abstract: 
This paper estimates the impact of financial development on industry-level total factor productivity (TFP) growth using a largely unexploited panel of 77 countries with data for 26 manufacturing industries for the years 1963 to 2003. A significant relationship is found between financial development and industry-level TFP growth when controlling for country-time and industry-time fixed effects. The results are both statistically and economically significant. TFP growth can accelerate up to 0.6 percent per year, depending on the external finance requirement of industries, following a one standard deviation increase in financial development. The results are robust to different samples and specifications.
Subjects: 
Financial development
TFP growth
Volatility
JEL: 
D24
E44
O47
Document Type: 
Working Paper

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