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The benefits from financial development are known to vary across industries. However, no systematic effort has been made to determine the technological characteristics that are shared by industries that tend to grow relatively faster in more financially developed countries. This paper explores a range of technological characteristics that might underpin differences across industries in the need or the ability to raise external funding. The main finding is that industries that grow faster in more financially developed countries tend to display greater R&D intensity or investment lumpiness, indicating that well-functioning financial markets direct resources towards industries that grow by performing R&D.

Industries --- Technology --- Industrialization --- Finance --- Econometric models. --- Economic aspects --- Industrial development --- Applied science --- Arts, Useful --- Science, Applied --- Useful arts --- Industrial production --- Industry --- Economic development --- Economic policy --- Deindustrialization --- Science --- Industrial arts --- Material culture --- Economics --- Industries, Primitive --- Finance: General --- Labor --- Public Finance --- Industries: Financial Services --- Financial Markets and the Macroeconomy --- Human Capital --- Skills --- Occupational Choice --- Labor Productivity --- Banks --- Depository Institutions --- Micro Finance Institutions --- Mortgages --- Innovation --- Research and Development --- Technological Change --- Intellectual Property Rights: General --- National Government Expenditures and Related Policies: Infrastructures --- Other Public Investment and Capital Stock --- Labour --- income economics --- general issues --- Public finance & taxation --- Financial sector development --- Human capital --- Collateral --- Capital spending --- Financial services industry --- Loans --- Capital investments --- United States --- General issues --- Income economics

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This paper develops a multi-industry growth model in which firms require external funds to conduct productivity-enhancing R&D. The cost of research is industry-specific. The tightness of financing constraints depends on the level of financial development and on industry characteristics. Over time, a financially constrained economy may converge to the growth path of a frictionless economy, so long as an industry with the fastest expanding technological frontier does not permanently fall behind due to low R&D. The model’s industry dynamics map into a differences-in-differences regression, in which industry growth depends on the interaction between financial development and industry level R&D intensity.

Business & Economics --- Economic Theory --- Economic development. --- Convergence (Economics) --- Economic convergence --- Development, Economic --- Economic growth --- Growth, Economic --- Economics --- Economic policy --- Statics and dynamics (Social sciences) --- Development economics --- Resource curse --- Finance: General --- Labor --- Macroeconomics --- Production and Operations Management --- Macroeconomics: Production --- Financial Markets and the Macroeconomy --- Labor Demand --- Labor Economics: General --- Finance --- Labour --- income economics --- Financial sector development --- Productivity --- Industrial productivity --- Self-employment --- Financial services industry --- Self-employed --- Labor economics --- United States --- Income economics

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This paper presents a stylized analysis of the effects of ring-fencing (i.e., different restrictions on cross-border transfers of excess profits and/or capital between a parent bank and its subsidiaries located in different jurisdictions) on cross-border banks. Using a sample of 25 large European banking groups with subsidiaries in Central, Eastern and Southern Europe (CESE), we analyze the impact of a CESE credit shock on the capital buffers needed by the sample banking groups under different forms of ring-fencing. Our simulations show that under stricter forms of ring-fencing, sample banking groups have substantially larger needs for capital buffers at the parent and/or subsidiary level than under less strict (or in the absence of any) ring-fencing.

Banks and banking, International. --- Transfer pricing. --- Cost transfer pricing --- Intercompany pricing --- Interdivisional transfer pricing --- Internal transfer pricing --- Pricing --- International banking --- Offshore banking (Finance) --- Transnational banking --- Financial institutions, International --- International finance --- Banks and Banking --- Macroeconomics --- Money and Monetary Policy --- Industries: Financial Services --- Banks --- Depository Institutions --- Micro Finance Institutions --- Mortgages --- International Lending and Debt Problems --- Monetary Policy, Central Banking, and the Supply of Money and Credit: General --- Financial Markets and the Macroeconomy --- Banking --- Finance --- Monetary economics --- Nonperforming loans --- Cross-border banking --- Credit --- Cross-border effects --- Banks and banking --- Loans --- Bulgaria

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En la serie de Documentos de Análisis del Personal Técnico del FMI se presentan los últimos análisis e investigaciones sobre políticas elaborados por miembros del personal técnico del FMI, que se publican para recibir comentarios y fomentar el debate. Estos documentos generalmente son breves y están escritos en un lenguaje no técnico, ya que se dirigen a un público amplio interesado en temas de política económica. Esta serie solo se publica en la página web y reemplazó en enero de 2011 a la serie de Notas de Opinión del Personal Técnico del FMI.

Banks and Banking --- Finance: General --- Public Finance --- Financial Crises --- Financial Institutions and Services: General --- Banks --- Depository Institutions --- Micro Finance Institutions --- Mortgages --- Financial Institutions and Services: Government Policy and Regulation --- Financing Policy --- Financial Risk and Risk Management --- Capital and Ownership Structure --- Value of Firms --- Goodwill --- International Lending and Debt Problems --- Portfolio Choice --- Investment Decisions --- Taxation, Subsidies, and Revenue: General --- Banking --- Finance --- Public finance & taxation --- Cross-border banking --- Foreign banks --- Liquidity --- Legal support in revenue administration --- Banks and banking --- International finance --- Banks and banking, Foreign --- Economics --- Revenue --- New Zealand

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In response to the volatility of capital flows since the mid-1990s, many emerging market economies have taken a variety of steps designed to “selfinsure” against volatile capital flows. One such measure has been the development of local securities and derivatives markets as an alternative source of funding the public and corporate sectors. This paper examines this self-insurance policy, focusing on the extent to which emerging markets have developed local securities and derivatives, and what key policy issues have arisen as a result.

Securities --- Derivative securities --- Derivative financial instruments --- Derivative financial products --- Derivative instruments --- Derivatives (Finance) --- Financial derivatives --- Structured notes (Securities) --- Blue sky laws --- Capitalization (Finance) --- Investment securities --- Portfolio --- Scrip --- Securities law --- Underwriting --- Investments --- Investment banking --- Law and legislation --- Finance: General --- Investments: Bonds --- Investments: Stocks --- Money and Monetary Policy --- General Financial Markets: General (includes Measurement and Data) --- Monetary Policy, Central Banking, and the Supply of Money and Credit: General --- Pension Funds --- Non-bank Financial Institutions --- Financial Instruments --- Institutional Investors --- Monetary Systems --- Standards --- Regimes --- Government and the Monetary System --- Payment Systems --- International Financial Markets --- Finance --- Investment & securities --- Monetary economics --- Emerging and frontier financial markets --- Stock markets --- Securities markets --- Derivative markets --- Corporate bonds --- Financial markets --- Bonds --- Financial institutions --- Financial services industry --- Stock exchanges --- Capital market --- Hong Kong Special Administrative Region, People's Republic of China