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Title: Essays on growth, financial markets, competition and inequality
Author: Anastasatou, Marianthi
ISNI:       0000 0004 2691 6471
Awarding Body: University of Bristol
Current Institution: University of Bristol
Date of Award: 2009
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This thesis is broadly involved with growth economics. It starts with a theoretical analysis of the relation between credit markets and economic growth. It considers an exogenous production function model with risky investment projects in which a borrower's (an investor's) risk type is private information. This asymmetry induces lenders to offer loan contracts which separate borrowers as to type. Self-selection can be induced by credit rationing or a screening mechanism which allows lenders to acquire information about a borrower's type. Screening is assumed to be imperfect in the sense that lenders can draw an imperfect inference if borrowers declare themselves as low-risk. The joint determination of the equilibrium loan contract and the economy's growth path and the steady-state capital stock is then explained. The next chapter investigates the extent at which financial development or trade openness of a country influences competition using data for 50 sectors for 8 Eurozone member states and the U. S. over 1981-2004. Financial depth may be associated with greater ease of entry and thus increased competition. Moreover, the effect might be greater in sectors where firms are relatively more dependent on external finance. The relation between trade openness and competition is then investigated. In response to greater foreign competition and increased imports, the market share for domestic producers falls and markups should decline. This relation might be stronger for those industries for which the relative volume of international trade is greater. The fourth chapter is an empirical analysis of the relationship between inequality and growth following on from the AER paper by De La Croix and Doepke. They suggest a mechanism whereby inequality has large effects on growth via the effect on differential fertility of rich and poor and provide empirical support for this thesis. This chapter goes back to the original data and also extends the econometric techniques used to analyze the relationship. Moreover, it suggests a more comprehensive measure of differential fertility and human capital inequality and finds that the relationship between differential fertility and growth is very fragile. It also raises concerns about the use of the squared value of a RHS variable as instrument. This point is addressed in the last chapter which investigates the properties of such instrument and the effect on the size of the bias of the Instrumental Variables's estimator.
Supervisor: Cannon, Edmund Sponsor: Not available
Qualification Name: Thesis (Ph.D.) Qualification Level: Doctoral
EThOS ID:  DOI: Not available