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Firm Heterogeneity, Credit Constraints, and Endogenous Growth

This paper is concerned with the role of firm heterogeneity under credit constraints for economic growth. We focus on firm size, innovativeness and credit constraints in a semi-endogenous growth model reflecting recent empirical findings on firm heterogeneity. It allows for an explicit solution for transitional growth and balanced growth path productivity as well as the growth maximizing firm heterogeneity. This enables us to draw inference about the impact of key policy parameters of the model on these quantities and to draw conclusions about firm and capital market related policies.

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File URL: http://www.wiwi.uni-augsburg.de/vwl/institut/paper/311.pdf
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Paper provided by Universitaet Augsburg, Institute for Economics in its series Discussion Paper Series with number 311.

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Date of creation: Apr 2010
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Handle: RePEc:aug:augsbe:0311
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