Financial development and TFP growth: Cross-country and industry-level evidence

Arbeitspapier

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.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Working Paper ; No. 682

Classification and Topics

• Classification: Wirtschaft ; Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity ; Financial Markets and the Macroeconomy ; Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
• Subject: Financial development ; TFP growth ; Volatility ; Produktivität ; Kreditmarkt ; Wirtschaftswachstum ; Finanzsektor ; Vergleich ; Welt

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Arizala, Francisco ; Cavallo, Eduardo ; Galindo, Arturo
• Event: Veröffentlichung
• (who): Inter-American Development Bank, Research Department
• (where): Washington, DC
• (when): 2009

Further information

• Handle: http://hdl.handle.net/10419/51444
• Last update: 10.03.2025, 11:45 AM CET