Financial openness and productivity / Geert Bekaert, Campbell R. Harvey, Christian Lundblad.
Material type:
TextSeries: Working paper series (National Bureau of Economic Research) ; no. 14843.Publication details: Cambridge, Mass. : National Bureau of Economic Research, 2009Description: 28, [11] p. : ill. ; 22 cmSubject(s): Free trade | Industrial productivity -- Econometric models | Economic development -- Econometric modelsLOC classification: HB1 | .N38 no. 14843Online resources: Click here to access online Summary: Financial openness is often associated with higher rates of economic growth. We show that the impact of openness on factor productivity growth is more important than the effect on capital growth. This explains why the growth effects of liberalization appear to be largely permanent, not temporary. We attribute these permanent liberalization effects to the role financial openness plays in stock market and banking sector development, and to changes in the quality of institutions. We find some indirect evidence of higher investment efficiency post-liberalization. We also document threshold effects: countries that are more financially developed or have higher quality of institutions experience larger productivity growth responses. Finally, we show that the growth boost from openness outweighs the detrimental loss in growth from global or regional banking crises.
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University of Macedonia Library Βιβλιοστάσιο Β (Stack Room B) | Research Papers | HB1.N38 no. 14843 (Browse shelf (Opens below)) | 1 | Available | 0013125734 |
Includes bibliographical references.
Financial openness is often associated with higher rates of economic growth. We show that the impact of openness on factor productivity growth is more important than the effect on capital growth. This explains why the growth effects of liberalization appear to be largely permanent, not temporary. We attribute these permanent liberalization effects to the role financial openness plays in stock market and banking sector development, and to changes in the quality of institutions. We find some indirect evidence of higher investment efficiency post-liberalization. We also document threshold effects: countries that are more financially developed or have higher quality of institutions experience larger productivity growth responses. Finally, we show that the growth boost from openness outweighs the detrimental loss in growth from global or regional banking crises.
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