Changing landscape of the finance-growth nexus: Industry growth, credit types, and external financial dependence

Mustafa Kilinc and Talat Ulussever

Journal of International Financial Markets, Institutions and Money, 2024, vol. 91, issue C

Abstract: The present paper examines the changing landscape of the finance-growth nexus using detailed industry-level data for 40 countries and 20 industries spanning 1980–2020. Regarding the long-term relationship between finance and growth, the findings indicate that industries more dependent on external finance experienced stronger growth in financially more developed markets during the 1980s and 1990s, but weaker growth in the 2000s and 2010s. Moreover, private credit changes are associated with lower industrial growth rates over the medium term. In terms of credit types, corporate credits generally have positive effects, while household credits display negative medium-term growth effects. These results highlight significant changes in the finance-growth relationship over the past four decades.

Keywords: Finance; Corporate credits; Household credits; Growth; External financial dependence (search for similar items in EconPapers)
JEL-codes: E32 E44 E51 G10 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:intfin:v:91:y:2024:i:c:s1042443124000271

DOI: 10.1016/j.intfin.2024.101961

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