Financial development and industry diversification
This paper empirically and theoretically studies industry or sec- tor diversication as a determinant to nancial development. The empirical evidence nds evidence that there is a robust relationship between industry (or sector) diversication and nancial development. The theoretical model explains...
Guardado en:
| Autores principales: | , |
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| Formato: | conferenceObject |
| Lenguaje: | Inglés |
| Publicado: |
Asociación Argentina de Economía Política
2021
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| Materias: | |
| Acceso en línea: | http://hdl.handle.net/11086/18349 |
| Aporte de: |
| Sumario: | This paper empirically and theoretically studies industry or sec- tor diversication as a determinant to nancial development. The empirical evidence nds evidence that there is a robust relationship between industry (or sector) diversication and nancial development. The theoretical model explains these results by modeling the endoge- nous development of the nancial system as a result of industry (or sector) diversication. An economy with more sectors (industry di- versication) imply a greater opportunity for diversifying lending risk and thus a reduction in the aggregate risk of the nancial system. This reduction in the aggregate risk of the nancial system is what de- termines nancial development. The policy implications are that the government should promote the creation of new industrial sectors by subsidizing R&D and horizontal innovation |
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