Structural change and financing constraints

Structural Change and Financing Constraints

In a multi-industry growth model, firms require external funds to conduct productivityenhancing R&D, and face financing constraints. The cost of research differs across industries, so that financing constraints hinder productivity growth in some industries more than in others. Equilibrium industry dynamics map into a differences-indifferences regression specification where industry growth depen...

A Model of Structural Change under Financing Constraints

In a multi-industry growth model, firms require external funds to conduct productivityenhancing R&D, and are limited by financing constraints. The cost of research differs across industries, so financing constraints hinder productivity growth in some industries more than in others. Equilibrium industry dynamics map into a differences-indifferences regression specification where industry growth ...

Corporate Governance and the Financing of Investment for Structural Change

Discussions of financial systems tend to identify banks (financial intermediaries) and markets as the major institutions determining the workings of the financial system as it guides the flow of funds from the household sector to the production sector of the economy. The contrast of "bankdominated" and "market-oriented" financial systems has for a long time occupied centre stage of the literatu...

Financing Constraints and Entrepreneurship

Specialization, Productivity, and Financing Constraints

We analyze optimal financial contracts when the specificity of investments is endogenous. Specialization decreases the liquidation value of assets, but improves the asset’s long-term productivity. While the former is known to make financing more difficult, we show that the latter can ease financing constraints and increase financing capacity by improving an entrepreneur’s incentive to repay. Th...