Technology and Financial Development |
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Authors: | ANNA ILYINA ROBERTO SAMANIEGO |
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Institution: | 1. Anna Ilyina is a Deputy Division Chief, Financial Sector Analysis Division, Money and Capital Markets Department, International Monetary Fund (E‐mail: ailyina@imf.org).;2. Roberto Samaniego is an Associate Professor at the Department of Economics, George Washington University (E‐mail: roberto@gwu.edu). |
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Abstract: | The growth benefits from financial development are known to vary across industries. However, no systematic effort has been made to determine the technological characteristics shared by industries that grow relatively faster in more financially developed economies. Using the standard growth‐theoretic definition of technology in terms of the production function, we explore a range of technological characteristics that theory suggests might underpin differences across industries in the need or the ability to raise external finance. We find that industries that grow faster in more financially developed countries display greater R&D intensity and investment lumpiness, indicating that well‐functioning financial markets direct resources toward industries where growth is driven by R&D. |
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Keywords: | D24 D92 G18 L60 O16 O33 technology financial development external finance dependence industry growth R&D intensity investment lumpiness institutions intellectual property rights |
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