TY - BOOK ID - 11271362 TI - Does Economic Diversification Lead to Financial Development? Evidence From topography AU - Ramcharan, Rodney. AU - International Monetary Fund. PY - 2006 SN - 1451862954 1462369995 1451908318 9786613829306 145276932X 1283516853 PB - Washington, D.C. : International Monetary Fund, DB - UniCat KW - Economic development -- Econometric models. KW - Electronic books. -- local. KW - Finance -- Econometric models. KW - Economic development KW - Finance KW - Econometric models. KW - Banks and Banking KW - Finance: General KW - Macroeconomics KW - Industries: Manufacturing KW - Demography KW - Industrialization KW - Manufacturing and Service Industries KW - Choice of Technology KW - Banks KW - Depository Institutions KW - Micro Finance Institutions KW - Mortgages KW - Financial Markets and the Macroeconomy KW - Demographic Economics: General KW - Industry Studies: Manufacturing: General KW - Economic Development: General KW - Banking KW - Population & demography KW - Manufacturing industries KW - Economic growth KW - Financial sector development KW - Bank deposits KW - Population and demographics KW - Manufacturing KW - Financial markets KW - Financial services KW - Economic sectors KW - Financial services industry KW - Banks and banking KW - Population KW - South Africa UR - https://www.unicat.be/uniCat?func=search&query=sysid:11271362 AB - An influential theoretical literature has observed that economic diversification can reduce risk and increase financial development. But causality operates in both directions, as a well functioning financial system can enable a society to invest in more productive but risky projects, thereby determining the degree of economic diversification. Thus, ordinary least squares (OLS) estimates of the impact of economic diversification on financial development are likely to be biased. Motivated by the economic geography literature, this paper uses instruments derived from topographical characteristics to estimate the impact of economic diversification on the development of finance. The fourth estimates suggest a large and robust role for diversification in shaping financial development. And these results imply that, by impeding financial sector development, the concentration of economic activity common in developing countries can adversely affect financial and economic development. ER -