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Impact of Credit Market Development and Stability on Productivity: New Evidence from the Industry Level

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  • Michalô °€ Brzozowski

    (University of Warsaw, Faculty of Economic Sciences)

Abstract

Using data on manufacturing industries (aggregated at the 2-digit level) from 118 advanced and developing countries, covering the period 1980-2014, I reassess the impact of financial development and provide new evidence on the effect of the volatility of credit on the growth of labor productivity. I show that labor productivity is boosted by the amount of credit and hindered by the variability of credit, but only in Pavitt's (1984) category of supplier-dominated industries. The amount and variability of credit seem to have no bearing on the growth of labor productivity in groups of science-based, specialized suppliers and scale-intensive sectors.

Suggested Citation

  • Michalô °€ Brzozowski, 2020. "Impact of Credit Market Development and Stability on Productivity: New Evidence from the Industry Level," Annals of Economics and Finance, Society for AEF, vol. 21(1), pages 111-129, May.
    • Handle: RePEc:cuf:journl:y:2020:v:21:i:1:brzozowski
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    More about this item

    Keywords

    Financial development; Credit variability; Labor productivity;
    All these keywords.

    JEL classification:

    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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