Specialization, Intermediation, and Growth

Alexander Galetovic ()

No 1, Documentos de Trabajo from Centro de Economía Aplicada, Universidad de Chile

Abstract: In market economies financial intermediaries develop during the early stages of industrialization. This paper argues that it occurs because as firms specialize the number of transactions involving credit increases. The main conclusions of the paper are : (a) when increased specialization is a necessary condition for growth, sustained growth may not start if financial intermediaries do not emerge. In this sense, intermediaries are a necessary condition for growth to start and persist; (b) when firms specialize intermediaries endogenously emerge, because they prevent the duplication of monitoring effort. Thus, it is specialization in the real sector which causes the emergence of intermediaries.

Date: 1996
References: Add references at CitEc
Citations: View citations in EconPapers (32)

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:edj:ceauch:1

Access Statistics for this paper

More papers in Documentos de Trabajo from Centro de Economía Aplicada, Universidad de Chile Contact information at EDIRC.
Bibliographic data for series maintained by ().