Investment in Relationship-Specific Assets: Does Finance Matter?
Copyright policy )Investment in Relationship-Specific Assets: Does Finance Matter?
Abstract Banks (but not stock markets) promote economic growth by facilitating relationship-specific investment between buyers and suppliers of intermediate goods. Combined insights from literature on signaling role of banks and on relationship-specific investment motivate this economic channel: A supplier is reluctant to undertake relationship-specific investment as she cannot observe financial stability and planning horizon of buyer. Banks can mitigate this information asymmetry. Empirical results from twenty-eight industries in ninety countries confirm that industries dependent on relationship-specific investment from their suppliers grow disproportionately faster in countries with a well-developed banking sector. The channel works via increased entry of new firms and higher capital accumulation.
- Tilburg University Netherlands
- Ludwig-Maximilians-Universität München Germany
- University of Glasgow United Kingdom
- Business School Lausanne Switzerland
- Webster University Geneva Switzerland
Saving and Capital Investment, financial development, Welt, growth, O40, Branchenentwicklung, …nancial development, Lieferanten-Kunden-Beziehung, Finanzintermediär, financial development;relationship-specific investment;growth, Entwicklung, financial development; relationship-specific investment; growth, financial development, relationship-specific investment, growth, Depository Institutions, Finanzsektor, relationship-speci…c investment, ddc:330, Investition, O40 - General, Financial development; relationship-specific investment; growth, …nancial development; relationship-speci…c investment; growth, relationship-specific investment, O16 - Financial Markets, Micro Finance Institutions, O16, Mortgages, G21, Corporate Finance and Governance, G21 - Banks, Schätzung, jel: jel:G21, jel: jel:O40, jel: jel:O16
Saving and Capital Investment, financial development, Welt, growth, O40, Branchenentwicklung, …nancial development, Lieferanten-Kunden-Beziehung, Finanzintermediär, financial development;relationship-specific investment;growth, Entwicklung, financial development; relationship-specific investment; growth, financial development, relationship-specific investment, growth, Depository Institutions, Finanzsektor, relationship-speci…c investment, ddc:330, Investition, O40 - General, Financial development; relationship-specific investment; growth, …nancial development; relationship-speci…c investment; growth, relationship-specific investment, O16 - Financial Markets, Micro Finance Institutions, O16, Mortgages, G21, Corporate Finance and Governance, G21 - Banks, Schätzung, jel: jel:G21, jel: jel:O40, jel: jel:O16
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