IDEAS home Printed from https://ideas.repec.org/a/taf/applec/v51y2019i11p1199-1211.html
   My bibliography  Save this article

Credit constraints and growth gains from governance

Author

Listed:
  • Joyce Hsieh
  • Ting-Cih Chen
  • Shu-Chin Lin

Abstract

This paper contributes to the governance literature by analyzing the specific mechanisms through which governance affects economic growth: The credit channel. Specifically, it investigates the growth impact of governance on industries with different levels of dependence on external finance. Better governance mitigates credit market imperfections by increasing transparency and accountability and reducing government-policy distortions, promoting productive investment and entrepreneurship development, with a disproportionate impact on sectors that depend on external finance. This paper indeed finds that countries with well-functioning governments are better at providing growth and investment environments for the expansion of industries that rely heavily on external finance and the formation of new establishments in these industries, when controlling for financial development. These results are robust to possible reverse causality, different specifications, subsamples and outliers.

Suggested Citation

  • Joyce Hsieh & Ting-Cih Chen & Shu-Chin Lin, 2019. "Credit constraints and growth gains from governance," Applied Economics, Taylor & Francis Journals, vol. 51(11), pages 1199-1211, March.
    • Handle: RePEc:taf:applec:v:51:y:2019:i:11:p:1199-1211
    DOI: 10.1080/00036846.2018.1527009
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/00036846.2018.1527009
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/00036846.2018.1527009?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:applec:v:51:y:2019:i:11:p:1199-1211. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/RAEC20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.