In this paper, they use crossindustry, crosscountry panel data to test whether industry growth is positively affected by the interaction between the reactivity of real short term interest rates to the business cycle and industrylevel measures of financial constraints. Financial constraints are measured, either by the extent to which the domestic industry is prone to being Vcredit constrainedV, or by the extent to which it is prone to being liquidity constrained. Our main findings are that: (i) the interaction between credit or liquidity constraints in an industry and monetary policy countercyclicality in the domestic country, has a positive, significant, and robust impact on the average annual rate of labor productivity in the domestic industry; (ii) these interaction effects tend to be more significant in downturns than in upturns; (iii) finally, while in downturns both, high%tech and low%tech sectors seem to benefit from more countercyclical monetary policies, in upturns it is the high%tech sectors which benefit most.