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Structural change and financing constraints

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  • Ilyina, Anna
  • Samaniego, Roberto

Abstract

In a multi-industry growth model, firms need external funds for productivity-enhancing R&D, and face financing constraints. The cost of research differs across industries, so financing constraints hinder industry productivity growth unevenly. Equilibrium industry dynamics map into a differences-in-differences regression specification where industry growth depends on the interaction between country financial development and industry R&D intensity. The paper provides a framework for interpreting several empirical results that rely on industry growth data in terms of R&D-induced technology transfer, and identifies a new channel for finance to encourage aggregate growth: the reallocation of resources towards sectors with rapidly expanding technological frontiers.

Suggested Citation

  • Ilyina, Anna & Samaniego, Roberto, 2012. "Structural change and financing constraints," Journal of Monetary Economics, Elsevier, vol. 59(2), pages 166-179.
  • Handle: RePEc:eee:moneco:v:59:y:2012:i:2:p:166-179 DOI: 10.1016/j.jmoneco.2011.12.002
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    References listed on IDEAS

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    Cited by:

    1. Samaniego, Roberto M., 2013. "Knowledge spillovers and intellectual property rights," International Journal of Industrial Organization, Elsevier, vol. 31(1), pages 50-63.
    2. Roberto Samaniego & Juliana Sun, 2016. "Productivity Growth and Structural Transformation," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 21, pages 266-285, July.
    3. Samaniego, Roberto & Sun, Juliana, 2016. "Gray's Anatomy: Understanding Uncertainty," MPRA Paper 72787, University Library of Munich, Germany.
    4. Samaniego, Roberto M. & Sun, Juliana Y., 2015. "Technology and contractions: evidence from manufacturing," European Economic Review, Elsevier, vol. 79(C), pages 172-195.
    5. Roberto Samaniego, 2013. "Stages of Diversification and Industry Productivity Differences," 2013 Meeting Papers 774, Society for Economic Dynamics.

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