Financial Structure and Industrial Structure
Bulletin of Economic Research, Forthcoming
Posted: 4 Mar 2008 Last revised: 3 Mar 2010
Date Written: February 29, 2008
This paper explores the relationship between financial structure and industrial structure in a panel co-integration framework, using annual data for 29 countries and 28 industrial sectors for the period 1990-2001. The results indicate that financial structure is to a significant extent related to industrial structure in the long-run, yet their relationship is partly consistent with the industrial sectors' technological orientation postulated by the theoretical literature. It is, however, in line with the so-called 'financial services view' that stresses the importance of a well developed financial system for growth, irrespective of its structure. In addition, the results indicate that financial structure does not seem to play a role in a sectors' performance relative to GDP.
Keywords: Financial Structure, Industrial Structure, Panel Co-integration
JEL Classification: G10, G20, O14
Suggested Citation: Suggested Citation