Financial Liberalization and the Industrial Response: Concentration and Entry in Malawi

Kabango, Grant P.; Paloni, Alberto

doi:10.1016/j.worlddev.2011.04.001

Cited by 16 publications

(17 citation statements)

References 33 publications

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“…Financial liberalization policies stimulate commercial banks to borrow from central bank thus increasing the volume of investment in society and fostering financial development.According to Gerschenkron (1962) banks in the developing countries can successfully enhance economic growth in many ways such as tempt firms to pay debts, surmount market breakdown, channel household reserve funds to deliberately essential ventures and provide financial support to the expansion projects. The executions of these policies are viewed as effective in improving monetary framework intermediation and intensity (Kabango & Paloni, 2011). Monetary development cannot always be experienced in the lower income and politically week nations.…”

Section: Literature Reviewmentioning

confidence: 99%

“…It is because on the one hand borrowing costs for small sized firms increase and on the other hand firms also gain greater access to finance (Harris, Schiantarelli, & Siregar, 1994). (Kabango & Paloni, 2011) report that the large and deep rooted firms are benefited from financial liberalization and the small and medium sized firms still confront financing restrictions in the period of financial development. According to the study of (Rajan & Zingales, 1998) the industries where most of the new firms depend upon external finance, gain more credit access and as a result grow more with financial liberalization as compared to those which are older and dependent less on external finance.…”

Section: Literature Reviewmentioning

confidence: 99%

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Response of Manufacturing Sector to Financial Liberalization in Pakistan

Baloch¹,

Fatima²,

Ahmed³

et al. 2020

JAFEE

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It has been believed that financial liberalization can stimulate industrial growth which may be translated into overall growth of the economy by efficient allocation of credit which generates investment opportunities by reducing the cost of investment, deregulations, privatizations and reduced capital controls. This paper aims to examine the impact of financial liberalization on industrial response in manufacturing industry measured as new firm entry. Moreover, moderating effect of external finance dependence on the relationship of financial liberalization and firm entry is estimated. We estimate the model using Generalized methods of moments and found that external finance dependence has a significant negative impact of new firm entry, while financial liberalization has a positive but insignificant impact on firm entry. Nevertheless, a statistically significant positive moderating impact of external finance dependence is documented which implies that the sectors which are more dependent on external finance gain disproportionate benefit from financial liberalization.

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Section: Literature Reviewmentioning

confidence: 99%

Section: Literature Reviewmentioning

confidence: 99%

Response of Manufacturing Sector to Financial Liberalization in Pakistan

Baloch¹,

Fatima²,

Ahmed³

et al. 2020

JAFEE

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“…In a developing country like Ghana, this is quite critical, as the increased competition will compel banks to search for new recipients for loans and investments opportunities even in economic regions that were hitherto considered to be risky (Ghosh, 2005). It has also been suggested that financial liberalization helps to promote industrialization as it removes the credit access constraint in firms especially small and medium ones (Kabongo and Paloni, 2011).…”

Section: Literature Reviewmentioning

confidence: 99%

Financial liberalization and banking sector performance in Ghana

Adams¹,

Agbemade²

2012

Afr. J. Bus. Manage.

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The study examined the impact of financial liberalization on the banking industry in Ghana. The paper reviews what has happened in the pre and post liberalization periods in the banking industry. Using recent data from the Ghana Banking Survey (2008) between 2003 and 2007, the study found that liberalization had many effects on the banking industry in Ghana, including: influx of new banks, increased intensity of competition, reduced profit margins, and increased access to loans. The study also found that the foreign banks have outperformed the local banks over the study period.

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“…Financial liberalization may in practice increase fragility and inequality and lead to political backlash against reforms [14]. In addition, financial liberalization resulted in an increase in industrial concentration and a decrease in net firm entry, especially in more finance-dependent sectors [15]. Moreover, some of the financial developments that lead to the expansion of credit may have decreased welfare, rather than increase it [16].…”

Section: Introductionmentioning

confidence: 99%

Interest Rate Marketization, Financing Constraints and R&D Investments: Evidence from China

2019

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Under the background of the initial completion of Chinese interest rate marketization process, this paper aims to test the actual impact of interest rate marketization on micro-enterprise research and development (R&D) investments financing. Based on the current situation, we put forward the assumption that Chinese enterprises are generally facing financing constraints in R&D investment. The interest rate marketization, which reduced government intervention in fund pricing, helps alleviate financing constraints, especially for non-state-owned enterprises. This paper focuses on the moderating effect of interest rate marketization on financing constraints and R&D investments. The interest rate marketization index is constructed from three indicators: interest rate determination ways, interest rate fluctuation restrictions, and real interest rate level. We use the Euler-equation investment model to test the financing constraints of R&D investment. Based on panel data of listed firms for 2007–2016, we find that R&D investment faces wide financing constraints, and interest rate marketization alleviates financing constraints. More specifically, financing constraints are more significant for non-state-owned firms than for state-owned enterprises, and the deepening marketization of interest rates can effectively alleviate the financing constraints of non-state-owned enterprises.

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Financial Liberalization and the Industrial Response: Concentration and Entry in Malawi

Cited by 16 publications

References 33 publications

Response of Manufacturing Sector to Financial Liberalization in Pakistan

Response of Manufacturing Sector to Financial Liberalization in Pakistan

Financial liberalization and banking sector performance in Ghana

Interest Rate Marketization, Financing Constraints and R&D Investments: Evidence from China

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