1887

OECD Economics Department Working Papers

Working papers from the Economics Department of the OECD that cover the full range of the Department’s work including the economic situation, policy analysis and projections; fiscal policy, public expenditure and taxation; and structural issues including ageing, growth and productivity, migration, environment, human capital, housing, trade and investment, labour markets, regulatory reform, competition, health, and other issues.

The views expressed in these papers are those of the author(s) and do not necessarily reflect those of the OECD or of the governments of its member countries.

English, French

Finance and Growth

Some Theoretical Considerations and a Review of the Empirical Literature

This paper aims at providing an overview of the theoretical considerations and a review of the empirical literature on the relationship between finance and growth. Section I describes the role of financial development in economic growth at the macro level, both theoretically and empirically. Section II examines the role of corporate finance in firm-level performance, especially focusing on the role of “internal funds” and “internal capital markets”. Section III presents a comparative analysis of financial systems, and analyses both the Asian crisis and the US venture capital phenomenon from this perspective. Section IV presents some policy implications and conclusions ...

English

Keywords: financial constraint, financial development, Asian crisis, financial systems, venture capital, growth
JEL: E44: Macroeconomics and Monetary Economics / Money and Interest Rates / Financial Markets and the Macroeconomy; G30: Financial Economics / Corporate Finance and Governance / Corporate Finance and Governance: General; G21: Financial Economics / Financial Institutions and Services / Banks; Depository Institutions; Micro Finance Institutions; Mortgages; G24: Financial Economics / Financial Institutions and Services / Investment Banking; Venture Capital; Brokerage; Ratings and Ratings Agencies; G10: Financial Economics / General Financial Markets / General Financial Markets: General (includes Measurement and Data); E22: Macroeconomics and Monetary Economics / Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy / Investment; Capital; Intangible Capital; Capacity
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