We examined Rajan and Zingales (1998)'s and Fisman and Love (2003)'s argument on
the relationship between technological external finance dependency, growth opportunities, and
industrial growth by applying them to Korea's industrial growth to ascertain the relationship.
Using domestic industry/year panel data, we find that industrial growth increased in the 19080s as a
result of external finance through credit rationing and in the 1990s by financing according to growth
opportunities. The results show that as financial markets develop, finances flow to industries where
the growth opportunities are highest (Fisman and Love (2003)’s hypothesis) and to industries that
predominate at each stage of economic development (Rajan and Zingales (1998) ’s hypothesis).
Financial dependence, growth opportunities, and industrial growth in Korea
[Seoul] : Korea Institute of Finance
|Subject Country||South Korea(Asia and Pacific)|
|Subject||Economy < Financial Policy|
|Holding||kif; KDI School of Public Policy and Management|