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= 0 +1
,1
+2
+3
,1
+
t
+
(1)
The dependent variable,
,
, is the rate of growth of total loans extended by
both banks and NBFIs.
4
The variable
and
stand for firm-fixed (industry-fixed) and year-fixed effects, respectively.
Model 2
The model for analyzing the second question, the degree of contribution of loans by
banks and NBFIs to firm (industry) TFP growth, takes the following form:
()
= 0 +1
,1
+2
+3
,1
+
t
+
(2)
The dependent variable is the firm (industry) TFP growth (()
).The regressor,
(
1
), weighs up an independent effect of the past loan growth on TFP
growth. The interaction term (
,1
= 0 +1
,1
+2
+3
,1
+4
1
+ 5
1
+
t
+
, (3)
where shdirect is the share of direct financing in total financing of an individual firm. In
this specification,
1
picks up the effect of a change in a firms financing
method toward the use of capital markets on its productivity (TFP) growth, while the
interaction term,
1