International Financial Liberalization and Industry Growth

International Journal of Finance & Economics, 2005

Posted: 14 Feb 2005  

Jonas Vlachos

Stockholm University - Department of Economics

Daniel Waldenström

Research Institute of Industrial Economics

Abstract

The growth effects of international financial liberalization 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.

Keywords: Financial liberalization, financial integration, economic growth, outsourcing

JEL Classification: F3, G1, O4

Suggested Citation

Vlachos, Jonas and Waldenström, Daniel, International Financial Liberalization and Industry Growth. International Journal of Finance & Economics, 2005. Available at SSRN: https://ssrn.com/abstract=666662

Jonas Vlachos

Stockholm University - Department of Economics ( email )

Stockholm, 10691
Sweden

Daniel Waldenstrom (Contact Author)

Research Institute of Industrial Economics ( email )

P.O. Box 55665
Grevgatan 34, 2nd floor
Stockholm, SE-102 15
Sweden

HOME PAGE: http://www.ifn.se/danielw

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