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Policy Research Working Papers
We analyze the relationship between financial development and inter-industry resource allocation in the short-and long-run. We suggest that in the long-run, economies with high rates of financial development will devote relatively more resources to industries with a 'natural' reliance on outside finance due to a comparative advantage in these industries. By contrast, in the short-run we argue that financial development facilitates the reallocation of resources to industries with good growthdoi:10.1596/1813-9450-3319 fatcat:medlfft5ejcrdmxr5xye7y3hmu