Arbeitspapier

Financial development beyond the formal financial market

This paper studies the effects of financial development, taking into account both formal and informal financing. Using cross-country firm-level data, we document that informal financing is utilized more by rich countries than poor countries. To account for this empirical pattern, we build a model in which the supply of informal financing increases with financial development, while the demand for informal financing declines with it. The model generates a hump-shaped relationship between the incidence of informal financing and GDP per capita. Our analysis shows that, at the early stage of economic development, the output loss from financial frictions is reinforced by the low supply of informal financing. Informal financing contributes more to the aggregate output of the richest countries than to that of the poorer countries in our sample.

Sprache
Englisch

Erschienen in
Series: Bank of Canada Staff Working Paper ; No. 2018-49

Klassifikation
Wirtschaft
Financial Markets and the Macroeconomy
Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
Thema
Productivity
Financial markets
Firm dynamics

Ereignis
Geistige Schöpfung
(wer)
Shao, Lin
Ereignis
Veröffentlichung
(wer)
Bank of Canada
(wo)
Ottawa
(wann)
2018

DOI
doi:10.34989/swp-2018-49
Handle
Letzte Aktualisierung
20.09.2024, 08:24 MESZ

Datenpartner

Dieses Objekt wird bereitgestellt von:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.

Objekttyp

  • Arbeitspapier

Beteiligte

  • Shao, Lin
  • Bank of Canada

Entstanden

  • 2018

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