Abstract
Industries in a country are subject to two sources of shifts to growth opportunities: one is global and industry-specific, affecting each industry equally across countries; the other is local and country-specific, affecting all industries within the same country equally. By implementing the methodology developed by Fisman and Love (2004a), this paper explores the role of financial development in helping industries to capture both global and local shocks to growth opportunities. The main difference with the original contribution of Fisman and Love (2004a) consists in the fact that the present paper proposes forward looking measures of growth opportunities based on the price-earnings ratios at industry level, as in Bekaert et al. (2007). By including these proxies directly in the Fisman and Love’s specification, this contribution suggests an important role of financial development in the allocation of resources among sectors, in response to emerging growth opportunities.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
