The effect of financial liberalization on capital accumulation, endogenous growth, and interindustry wage differentials: The case of Taiwan
The main purpose of the thesis is to investigate the link between financial policy and economic growth by focusing on the link between financial intermediation and capital accumulation. The investigation strategy is to examine the effect of recent reform in financial markets in Taiwan on its industrial growth as case study and test several hypotheses suggested by recent theoretical studies. A key hypothesis tested in the thesis is whether knowledge can create an increase in returns to capital through an external effect of knowledge spillovers on capital investment. If capital-related external effects do exist in an economy, then the importance of capital accumulation in the process of economic growth will be maintained within endogenous growth models which emphasize that technological change is of central importance in economic growth. Furthermore, the existence of Marshallian external increasing returns implies that financial liberalization can have an important effect on economic growth.
Economics, Finance, Business Administration, Banking
University of Illinois - Urbana-Champaign
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University of Illinois at Urbana-Champaign