We find a more negative impact of a financial crisis on growth of industrial sectors in developed countries that are more dependent on external finance, also when controlling for omitted variables by including country–time, industry–time and country–industry fixed effects. This differential effect is stronger in countries with a more leveraged financial sector, while it is unaffected by the depth of financial markets.
- financial crisis
- industrial growth
- credit crunch
Bijlsma, M., Dubovik, A., & Straathof, B. (2015). How does financial market structure affect the impact of a banking crisis? Economics Letters, 135, 144-147. https://doi.org/10.1016/j.econlet.2015.08.019