The robustness of the cross-sectional relationship between the size of a country's financial sector and its rate of economic growth is by now well established. In this article, we examine whether the strength of this relationship varies with the inflation rate. Using five-year averages of...

Using two newly available datasets of listed firms covering the period from 1994 to 2003, we test if share-issue privatization, defined here as the change of corporate control from the State to private owners rather than the IPO event as in earlier studies, improved firm performance in China. To...

We examine investment behavior among exchange-listed Korean manufacturing firms before and after the 1997 financial crisis using firm-level panel data. We start with the standard Q-theory of investment, and then augment it by allowing for a sales accelerator and the possibility of cash...

Although the finance-growth relationship is now firmly entrenched in the empirical literature, we show that it is not as strong in more recent data as it was in the original studies with data for the period from 1960 to 1989. We consider two related explanations. First, excessive financial...

We consider the roles of monetary shocks and tightening credit market conditions in the transmission of South Korea's 1997 financial crisis to the real sector, and compare the relative impacts of these factors on production in light and heavy industries. Using structural regression equations,...

Using quarterly data for 1995-2005, we examine the role of financial factors in China's recent increases in real sector activity. A series of cointegrated VAR models indicate that banking sector development was central to these successes, but that stock market development, as measured by market...

This paper focuses on innovation as a determinant of the rapid financial deepening that characterized the U.S. economy from 1872 to 1929. After describing the key innovations adopted by national banks in New York City over this period, it presents an example in which better loan monitoring in...

This paper uses standard tools of empirical macro economics to examine how well the existing historical time series support a role for financial factors in real sector activity in four economies that experienced what are widely considered to be 'financial revolutions' over the past 400 years....

Recent cross-country investigations of the role of institutional fundamentals such as the protection of property rights in promoting financial development have extended a literature that has for decades maintained that financial factors can affect real outcomes. In this paper we pursue this new...

We find that new firms real investment responds much more elastically to aggregate Tobin s Q than does that of established firms. On the financial side, IPOs respond more elastically to Tobin s Q than seasoned offerings of securities. The explanation seems to be that a high aggregate Q raises...