The Contribution of Rapid Financial Development to Asymmetric Growth of Manufacturing Industries: Common Claims vs. Evidence for Poland

Journal of Economic Asymmetries, Vol. 1, No. 2, pp. 87-120, December 2004

48 Pages Posted: 8 Sep 2004

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Abstract

CEE countries such as Poland started to experience a very high rate of financial development within a few years after emerging from socialism. A review of the literature suggests that this asymmetric development should have been most beneficial for those industry sectors most dependent on external finance. However, the widely-used Rajan and Zingales (1998) measure of young (exchange-listed U.S.) companies' dependence on external finance had no explanatory power for the structure of industry growth in Poland. This negative finding held for 1990-2001 as a whole and for two distinct sub-periods that differed in the speed of financial development. Reasons for this failure, and correlates of the RZ measure, are examined.

Keywords: Financial Development, Dependence on External Finance, Industry Structure, Poland

JEL Classification: G20, G22, O14, O16

Suggested Citation

von Furstenberg, George M., The Contribution of Rapid Financial Development to Asymmetric Growth of Manufacturing Industries: Common Claims vs. Evidence for Poland. Journal of Economic Asymmetries, Vol. 1, No. 2, pp. 87-120, December 2004. Available at SSRN: https://ssrn.com/abstract=586963

George M. Von Furstenberg (Contact Author)

Indiana University ( email )

Department of Economics
Wylie Hall, Indiana University
Bloomington, IN 47405-6620
United States
812-856-1382 (Phone)
812-855-3736 (Fax)

HOME PAGE: http://mypage.iu.edu/~vonfurst/

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