TY - BOOK ID - 135020153 TI - Financial Crises, Financial Dependence, and Industry Growth AU - Klingebiel, Daniela AU - Kroszner, Randy AU - Laeven, Luc PY - 2002 PB - Washington, D.C., The World Bank, DB - UniCat KW - Adverse Consequences KW - Adverse Effects KW - Adverse Selection KW - Bank Lending KW - Banks and Banking Reform KW - Cred Development KW - Debt Markets KW - Economic Growth KW - Economic Research KW - Economic Theory and Research KW - Emerging Markets KW - Finance and Financial Sector Development KW - Financial Crises KW - Financial Crisis KW - Financial Literacy KW - Financial Sector KW - Inequality KW - Investment and Investment Climate KW - Labor Policies KW - Liquidity KW - Macroeconomic Management KW - Macroeconomics and Economic Growth KW - Markets KW - Monetary Policy KW - Moral Hazard KW - Poverty Reduction KW - Private Sector Development KW - Pro-Poor Growth KW - Social Protections and Labor KW - Total Factor Productivity KW - Total Factor Productivity Growth KW - Trade KW - Value KW - Value Added UR - https://www.unicat.be/uniCat?func=search&query=sysid:135020153 AB - Laeven, Klingebiel, and Kroszner investigate the link between financial crises and industry growth. They analyze data from 19 industrial and developing countries that have experienced financial crises during the past 30 years to investigate how financial crises affect sectors dependent on external sources of finance. Specifically, the authors examine whether the impact of a financial crisis on externally dependent sectors varies with the depth of the financial system. They find that sectors highly dependent on external finance tend to experience a greater contraction of value added during a crisis in deeper financial systems than in countries with shallower financial systems. They hypothesize that the deepening of the financial system allows sectors dependent on external finance to obtain relatively more external funding in normal periods, so a crisis in such countries would have a disproportionately negative effect on externally dependent sectors. In contrast, since externally dependent firms tend to obtain relatively less external financing in shallower financial systems (and hence have relatively lower growth rates in such countries during normal times), a crisis in such countries has less of a disproportionately negative effect on the growth of externally dependent sectors. This paper-a product of the Financial Sector Strategy and Policy Department-is part of a larger effort in the department to study the link between financial development and economic growth. The authors may be contacted at llaeven@worldbank.org, dklingebiel@worldbank.org, or randy.kroszner@gsb.uchicago.edu. ER -