Financial dependence and industry growth in Europe : Better banks and higher productivity

  title={Financial dependence and industry growth in Europe : Better banks and higher productivity},
  author={Robert Inklaar and M. Koetter},
Financial development stimulates growth, in particular in industries dependent on external finance. In this paper we show that more efficient banks are particularly important in stimulating both output and productivity growth, while traditional volume measures of finance are much less important for productivity growth. For this we exploit firm-level information to measure the dependence of industries on external finance and the efficiency of intermediaries. Our results are in line with… CONTINUE READING

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