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 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
| Main Authors: | , |
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| Format: | Fil: Fil: Schclarek Curutchet, Alfredo. Universidad Nacional de Córdoba. Facultad de Ciencias Económicas. Departamento de Economía y Finanzas; Argentina. biblioteca |
| Language: | eng |
| Published: |
Asociación Argentina de Economía Política
2013-11
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| Subjects: | Vertical innovation, Horizontal innovation, Industry diversification, Financial development, Economic growth, Imperfect information, |
| Online Access: | http://hdl.handle.net/11086/18349 |
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