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- W2971579907 abstract "While the literature on financial development generally shows a strong correlation between quantity of finance and economic development, the issue of financial crises and the effect of quality of finance have not been taken adequately into account. The 2008-9 global financial crisis provides a useful context in which to explore this relationship. We argue that, for the purposes of mitigating the adverse effects of financial crises on the real sector, the quantity of finance (measured as domestic credit) should be backed by quality of finance (measured as bank efficiency, integrity in bank lending, and bank private monitoring). Using a sample of 28 industries from 63 countries, we find support for our main argument. Specifically, we find that industries that are more dependent on external finance were disproportionately more resilient during the recent crisis. This was especially true if they were located in countries where high financial quantity during the pre-crisis period was accompanied by a better financial quality. These results suggest that paying attention to the quality of finance may assist in mitigating the adverse real impact of financial crises, and that there is indeed such a thing as an excessive quantity of finance." @default.
- W2971579907 created "2019-09-12" @default.
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- W2971579907 date "2019-11-01" @default.
- W2971579907 modified "2023-10-18" @default.
- W2971579907 title "The interaction of quantity and quality of finance: Did it make industries more resilient to the recent global financial crisis?" @default.
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- W2971579907 doi "https://doi.org/10.1016/j.iref.2019.08.010" @default.
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