Financial development and dynamic investment behavior : evidence from panel vector autoregression

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Financial development and dynamic investment behavior : evidence from panel vector autoregression, Volume 1

Author:	Love, Inessa; Zicchino, Lea;	Collection Title:	Policy, Research working paper series ; no. WPS 2913
Date Stored:	2002/11/11	Document Date:	2002/10/31
Document Type:	Policy Research Working Paper	Language:	English
Report Number:	WPS2913	Sub Sectors:	General finance sector
SubTopics:	Environmental Economics & Policies; International Terrorism & Counterterrorism; Economic Theory & Research; Financial Intermediation; ICT Policy and Strategies	Volume No:	1
Related Dataset:	Panel VAR (vector autoregression);

Summary: The authors apply vector autoregression to firm-level panel data from 36 countries to study the dynamic relationship between firms' financial conditions and investment. They argue that by using orthogonalized impulse-response functions they are able to separate the "fundamental factors" (such as marginal profitability of investment) from the "financial factors" (such as availability of internal finance) that influence the level of investment. The authors find that the impact of the financial factors on investment, which they interpret as evidence of financing constraints, is significantly larger in countries with less developed financial systems. The finding emphasizes the role of financial development in improving capital allocation and growth.


Official Documents Official, scanned versions of documents (may include signatures, etc.)
File Type		Description	File Size (mb)

	PDF 40 pages	Official version*	2.8 (approx.)
	Text	Text version**


Light-Weight Documents Lighter (less MB) documents which may or may not be the final, official version
File Type		Description	File Size (mb)

	PDF 34 pages	WPS2913	0.23

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** The text version is the OCR text of the final scanned version and is not an accurate representation of the final text.
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