Question

quality and quantity of finance​

Answer 1

Explanation:

While the literature on financial development generally shows a strong correlation between quantity of finance and economic development, the issue of financial crises and the effect of quality of finance have not been taken adequately into account. The 2008-9 global financial crisis provides a useful context in which to explore this relationship. We argue that, for the purposes of mitigating the adverse effects of financial crises on the real sector, the quantity of finance (measured as domestic credit) should be backed by quality of finance (measured as bank efficiency, integrity in bank lending, and bank private monitoring). Using a sample of 28 industries from 63 countries, we find support for our main argument. Specifically, we find that industries that are more dependent on external finance were disproportionately more resilient during the recent crisis. This was especially true if they were located in countries where high financial quantity during the pre-crisis period was accompanied by a better financial quality. These results suggest that paying attention to the quality of finance may assist in mitigating the adverse real impact of financial crises, and that there is indeed such a thing as an excessive quantity of finance

Answer 2

Answer: International Review of Economics & Finance

International Review of Economics & FinanceVolume 64, November 2019, Pages 493-512

International Review of Economics & FinanceVolume 64, November 2019, Pages 493-512The interaction of quantity and quality of finance: Did it make industries more resilient to the recent global financial crisis?

International Review of Economics & FinanceVolume 64, November 2019, Pages 493-512The interaction of quantity and quality of finance: Did it make industries more resilient to the recent global financial crisis?Author links open overlay panelAli Mirzaei a, Robert Grosse b

International Review of Economics & FinanceVolume 64, November 2019, Pages 493-512The interaction of quantity and quality of finance: Did it make industries more resilient to the recent global financial crisis?Author links open overlay panelAli Mirzaei a, Robert Grosse bShow more

International Review of Economics & FinanceVolume 64, November 2019, Pages 493-512The interaction of quantity and quality of finance: Did it make industries more resilient to the recent global financial crisis?Author links open overlay panelAli Mirzaei a, Robert Grosse bShow moreShare

International Review of Economics & FinanceVolume 64, November 2019, Pages 493-512The interaction of quantity and quality of finance: Did it make industries more resilient to the recent global financial crisis?Author links open overlay panelAli Mirzaei a, Robert Grosse bShow moreShareCite

International Review of Economics & FinanceVolume 64, November 2019, Pages 493-512The interaction of quantity and quality of finance: Did it make industries more resilient to the recent global financial crisis?Author links open overlay panelAli Mirzaei a, Robert Grosse bShow moreShareCitehttps://doi.org/10.1016/j.iref.2019.08.010

International Review of Economics & FinanceVolume 64, November 2019, Pages 493-512The interaction of quantity and quality of finance: Did it make industries more resilient to the recent global financial crisis?Author links open overlay panelAli Mirzaei a, Robert Grosse bShow moreShareCitehttps://doi.org/10.1016/j.iref.2019.08.010Get rights and content

International Review of Economics & FinanceVolume 64, November 2019, Pages 493-512The interaction of quantity and quality of finance: Did it make industries more resilient to the recent global financial crisis?Author links open overlay panelAli Mirzaei a, Robert Grosse bShow moreShareCitehttps://doi.org/10.1016/j.iref.2019.08.010Get rights and contentAbstract

International Review of Economics & FinanceVolume 64, November 2019, Pages 493-512The interaction of quantity and quality of finance: Did it make industries more resilient to the recent global financial crisis?Author links open overlay panelAli Mirzaei a, Robert Grosse bShow moreShareCitehttps://doi.org/10.1016/j.iref.2019.08.010Get rights and contentAbstractWhile the literature on financial development generally shows a strong correlation between quantity of finance and economic development, the issue of financial crises and the effect of quality of finance have not been taken adequately into account. The 2008-9 global financial crisis provides a useful context in which to explore this relationship. We argue that, for the purposes of mitigating the adverse effects of financial crises on the real sector, the quantity of finance (measured as domestic credit) should be backed by quality of finance (measured as bank efficiency, integrity in bank lending, and bank private monitoring). Using a sample of 28 industries from 63 countries, we find support for our main argument. Specifically, we find that industries that are more dependent on external finance were disproportionately more resilient during the recent crisis. This was especially true if they were located in countries where high financial quantity during the pre-crisis period was accompanied by a better financial quality. These results suggest that paying attention to the quality of finance may assist in mitigating the adverse real impact of financial crises, and that there is indeed such a thing as an excessive quantity of finance.