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International Financial Liberalization and Industry Growth

  • Vlachos, Jonas


    (The Research Institute of Industrial Economics)

  • Waldenström, Daniel


    (Stockholm School of Economics)

The growth effects of international financial liberalization and integration are investigated using the methodology and data developed by Rajan and Zingales (1998). The main result is that industries highly dependent on external financing do not experience higher growth in value added in countries with liberalized financial markets. Liberalization does, however, increase the growth rates of both production and firm creation among externally dependent industries - given that the countries have reached a relatively high level of financial development. These results are consistent both with increased competition and increased outsourcing. Some preliminary evidence point towards the latter explanation.

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Paper provided by Research Institute of Industrial Economics in its series Working Paper Series with number 586.

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Length: 41 pages
Date of creation: 21 Nov 2002
Date of revision:
Handle: RePEc:hhs:iuiwop:0586
Contact details of provider: Postal: Research Institute of Industrial Economics, Box 55665, SE-102 15 Stockholm, Sweden
Phone: +46 8 665 4500
Fax: +46 8 665 4599
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