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multiple cointegration. Financial frictions are captured by including balance sheet indicators of firms and banks (cash flow … significant impact on investment. -- aggregate investment ; financial frictions ; cointegration ; error correction models. …
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Studies on the finance-growth link use different proxy variables for financial development. Among the most used is the total credit share in the GDP. Previous empirical studies show to be sensitive to the choice of the finance proxy indicator. Total credit share in the GDP appears biased in...
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