Dependence on External Finance: An Inherent Industry Characteristic?

George von Furstenberg and Ulf von Kalckreuth

Open Economies Review, 2006, vol. 17, issue 4, 559 pages

Abstract: Rajan and Zingales (1998) use U.S. Compustat firm data for the 1980s to obtain measures of manufacturing sectors’ Dependence on External Finance (DEF). They take any differences in these measures to be structural/technological and thus applicable to other countries. Their joint assumptions about how to obtain representative values of DEF by sector and about why these values differ fundamentally have been adopted in additional studies seeking to show that sectors benefit unequally from a country’s level of financial development. However, the assumptions as such have not been examined. The present study, conducted with cyclically adjusted annual measures of DEF derived from U.S. industry data for 1977–1997, attempts to do so using data that are aggregated by sector. Copyright Springer Science + Business Media, LLC 2006

Keywords: growth and finance; financial development; industry structure (search for similar items in EconPapers)
Date: 2006
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Citations: View citations in EconPapers (19)

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DOI: 10.1007/s11079-006-0364-8

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