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AuthorDiallo B.
Available date2020-02-06T08:09:21Z
Publication Date2018
Publication NameEconomic Modelling
ResourceScopus
ISSN2649993
URIhttp://dx.doi.org/10.1016/j.econmod.2017.03.011
URIhttp://hdl.handle.net/10576/12861
AbstractFinancial crises pose many problems for growth, and in this time of increasing financial instability it is important to fully understand why this happens. Many papers have analyzed the relationship between growth and a country's level of financial development using private credit, which leads to several unexpected problems. However, very few have used bank efficiency to gauge the development of the financial sector. The aim of this paper is to analyze the effect of bank efficiency on value-added growth of industries that were most dependent on external financing during the financial crisis. Specifically, it uses the data envelopment analysis (DEA) method to measure the efficiency of the banking sector across countries, according to the empirical strategy offered by Rajan and Zingales (1998). Our main result shows that bank efficiency relaxed credit constraints and increased the growth rate for financially dependent industries during the crisis. This finding shows the great but overlooked importance of bank efficiency in mitigating the negative effects of financial crises on growth for industries that are most dependent on external financing. - 2017 Elsevier Ltd
Languageen
PublisherElsevier B.V.
SubjectBank efficiency
Banking crises
Financial dependence
Financial friction
Growth
TitleBank efficiency and industry growth during financial crises
TypeArticle
Pagination22-Nov
Volume Number68
dc.accessType Abstract Only


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