Varela, Liliana (2018) Reallocation, competition and productivity : evidence from a financial liberalization episode. The Review of Economic Studies, 85 (2). pp. 1279-1313. doi:10.1093/restud/rdx046 ISSN 0034-6527.

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Abstract

This paper studies the impact of distortions in the access to international capital markets on competition and productivity. I show that a reduction in these distortions leads to an increase in aggregate productivity through two different channels. First, firms that were previously credit constrained respond to better financing terms by increasing their investment in technology, a reallocation effect. Second, non-constrained firms also expand their investment in technology because of increased competition, a pro-competitive effect. I provide evidence for these two channels using firm-level census data from the deregulation of international financial flows in Hungary.

Item Type:	Journal Article
Subjects:	H Social Sciences > HB Economic Theory
Divisions:	Faculty of Social Sciences > Economics
Library of Congress Subject Headings (LCSH):	Industrial productivity, Finance -- Management, Capital movements, Competition, Capital movements -- Hungary
Journal or Publication Title:	The Review of Economic Studies
Publisher:	Oxford University Press
ISSN:	0034-6527
Official Date:	1 April 2018
Dates:	Date Event 1 April 2018 Published 18 August 2017 Available 30 April 2017 Accepted
Volume:	85
Number:	2
Page Range:	pp. 1279-1313
DOI:	10.1093/restud/rdx046
Status:	Peer Reviewed
Publication Status:	Published
Access rights to Published version:	Restricted or Subscription Access
Date of first compliant deposit:	1 September 2017
Date of first compliant Open Access:	18 August 2019

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