scholarly journals FINANCE AND BALANCED GROWTH

2013 ◽  
Vol 18 (4) ◽  
pp. 883-898 ◽  
Author(s):  
Alex Trew
Keyword(s):  
Economic Growth ◽  
Endogenous Growth ◽  
Financial Development ◽  
Financial Services ◽  
Value Added ◽  
Financial Efficiency ◽  
Balanced Growth ◽  
Empirical Results ◽  
Cross Country ◽  
The Relationship

We study the relationships between various concepts of financial development and balanced economic growth. A model of endogenous growth that incorporates roles for both financial efficiency and access to financial services permits a better understanding of the relationship between the size of the financial sector (value added) and growth. Higher financial value added results from some, but not all, kinds of finance-driven growth. If greater access rather than greater efficiency generates higher growth, then value added and growth can be positively correlated. We present some preliminary empirical results that support the importance of access alongside efficiency in explaining cross-country variations in growth.

Empirical Analysis about the Relationship between Economic Growth and Financial Development: Evidence from China

2012 ◽  
Vol 468-471 ◽  
pp. 1578-1584
Author(s):  
Yun Dong Wen
Keyword(s):  
Economic Growth ◽  
Empirical Analysis ◽  
Financial Development ◽  
Significant Influence ◽  
Financial Structure ◽  
Financial Efficiency ◽  
Empirical Results ◽  
The Relationship

This paper aims to use China as the research sample to investigate the relationship among economic growth and financial development. Degrees of financial development, financial efficiency, financial structure and financial freedom will be used to reflect China’s financial development. The empirical results show the financial development has no significant influence on China’s economic growth.

scholarly journals Non-Linear Relationship between Financial Development, Economic Growth and Growth Volatility: Evidence from Nigeria

2018 ◽  
Author(s):  
Oro Ufuo Oro ◽  
Paul Alagidede
Keyword(s):  
Economic Growth ◽  
Linear Relationship ◽  
Financial Development ◽  
Financial Services ◽  
Policy Implications ◽  
Empirical Literature ◽  
Development Economic ◽  
Econometric Methods ◽  
Growth Volatility ◽  
The Relationship

The relationship between economic growth, growth volatility and financial sector development continues to attract attention in the theoretical and empirical literature. Over time, some studies hypothesize that finance has a causal linear relationship with growth. Recently several other authors contradict this claim and argue that the relationship that exists between finance and growth is nonlinear. We investigate these claims for Nigeria for the period between 1970 and 2015, using semi-parametric econometric methods, Hansen sample splitting techniques and threshold estimator. We observed no evidence of ‘Too much finance’ as claimed by many researchers in recent times. We show that the relationship between financial development and economic growth is U-shaped. This is equally true for the relationship between financial development and growth volatility. We also discuss policy implications of our findings and recommend financial innovations and decentralization of stock exchanges to boost access to financial services, in addition, improved regulation to enhance financial market efficiency.

scholarly journals Filling the Gap

2020 ◽  
Vol 20 (150) ◽  
Author(s):  
Majid Bazarbash ◽  
Kimberly Beaton
Keyword(s):  
Financial Development ◽  
Low Income ◽  
Low Income Countries ◽  
Financial Efficiency ◽  
Financial Depth ◽  
Consumer Segment ◽  
Cross Country ◽  
Credit Gap ◽  
The Relationship

Can fintech credit fill the credit gap in the consumer and business segments? There are few cross-country studies that explore this question. Focusing on marketplace lending, an important part of fintech credit, we use data for 109 countries from 2015 to 2017 to study the relationship between fintech credit to businesses and consumers and various aspects of financial development. Marketplace lending to consumers grows in countries where financial depth declines highlighting the role of fintech credit in filling the credit gap by traditional lenders. This result is particularly strong in low-income countries. In the business segment, marketplace lending expands where financial efficiency declines. Our findings show that low-income countries take advantage of the fintech credit opportunity in the consumer segment but face important challenges in the business segment.

scholarly journals “FINANCE AND GROWTH” RE-VISITED

2020 ◽  
Vol 08 (01) ◽  
pp. 2050001
Author(s):  
LIZETHE MÉNDEZ-HERAS ◽  
STEVEN ONGENA
Keyword(s):  
Economic Growth ◽  
Financial Development ◽  
Financial Services ◽  
Research Agenda ◽  
Growth Regressions ◽  
Primary Determinant ◽  
Almost All ◽  
The Relationship ◽  
Positive Effect ◽  
Finance Growth Nexus

We test whether the relationship between finance and growth is present in 48 countries over 20 different periods of an equal length of 15 years, starting in 1980 (to 1995) and ending in 1999 (to 2014). We estimate growth regressions using an IV approach and we find that (1) overall financial development had a positive effect on economic growth for almost all our studied periods, (2) the legal system is the primary determinant of the effectiveness of the overall financial system, and (3) financial services were relevant for economic growth even during the financial crisis of 2008. This research is part of a research agenda revisiting the finance–growth nexus using up-to-date empirical methodologies.

Exploring the Root-Leaf Relationship between the Manufacturing and Financial Services Industry in Taiwan

2008 ◽  
Vol 11 (04) ◽  
pp. 493-509 ◽  
Author(s):  
Chin-Chen Chien ◽  
Cheng-Few Lee ◽  
Ya-Yun Cheng
Keyword(s):  
Economic Growth ◽  
Granger Causality ◽  
Emerging Economies ◽  
Financial Services ◽  
Feedback System ◽  
Financial Services Industry ◽  
Half Century ◽  
Empirical Results ◽  
Services Industry ◽  
The Relationship

We employ the concept of Granger causality to investigate the root-leaf relationship between the manufacturing and financial services industry in Taiwan's economy. Our empirical results show that manufacturing led finance for the last half century, which is consistent with the pattern of other emerging economies. However, the liberalization of the financial services industry in the 1980s changed the relationship from "manufacturing leads, finance follows" to a feedback system. Accordingly, the financial services industry should play a more important role than previously for Taiwan to maintain its economic growth.

scholarly journals Financial and economic development link in transitional economies: a spectral Granger causality analysis 1991–2017

2019 ◽  
Vol 10 (1) ◽  
pp. 7-35 ◽  
Author(s):  
Marinko Skare ◽  
Małgorzata Porada-Rochoń
Keyword(s):  
Economic Growth ◽  
Granger Causality ◽  
Financial Development ◽  
Value Added ◽  
Granger Causality Test ◽  
Transitional Economies ◽  
Causality Analysis ◽  
Causality Test ◽  
Study Results ◽  
The Relationship

Research background: The relationship between financial development and economic growth has been attracting attention in the field of economics since the times of the “great moderation”. Previous empirical studies still fail to put forward a general conclusion on whether and how financial development affects economic growth. This is particularly true due to the lack of empirical research on the matter in question for countries in transition. Purpose of the article: This study aims to contribute to bridging the gap in the financial development-growth nexus in transitional economies. Understanding the mechanism behind financial development and economic growth should assist policymakers in the design of efficient economic policies or avoiding/alleviating financial cycles. Methods: Using Granger causality test in frequency domain, which shows to have more power over standard time domain Granger causality test, as well as gross domestic product (GDP) and the monetary base (M2 — intermediate money), we investigated the finance-growth relationship in 19 Central, East, and Southeast European countries (CESEE) from 1991 to 2017. Findings & Value added: Study results show that financial development is important for growth in CESEE countries, thus supporting the “supply-leading” theories in general for countries in the sample. Our findings indicate that the relationship between financial development and economic growth exists in CESEE countries (with one exception — the Czech Republic) ranging from unidirectional (Albania, Bosnia and Hercegovina, Belarus, Estonia, Macedonia, Russia, Turkey), to bi-directional spectral Granger causality (Bulgaria, Croatia, Hungary, Kazakhstan, Latvia, Lithuania, Poland, Romania, Slovenia, Slovakia, Ukraine).

Financial Intermediation and Growth: Theory and Some Cross-Country Evidence

1997 ◽  
Vol 36 (4II) ◽  
pp. 855-862
Author(s):  
Tayyeb Shabir
Keyword(s):  
Economic Growth ◽  
Financial Markets ◽  
Financial Intermediation ◽  
Empirical Estimates ◽  
Financial Liberalisation ◽  
Cross Country ◽  
Level Of Significance ◽  
The Relationship ◽  
Positive Effect ◽  
Theoretical Developments

Well-functioning financial markets can have a positive effect on economic growth by facilitating savings and more efficient allocation of capital. This paper characterises some of the recent theoretical developments that analyse the relationship between financial intermediation and economic growth and presents empirical estimates based on a model of the linkage between financially intermediated investment and growth for two separate groups of countries, developing and advanced. Empirical estimates for both groups suggest that financial intermediation through the efficiency of investment leads to a higher rate of growth per capita. The relevant coefficient estimates show a higher level of significance for the developing countries. This financial liberalisation in the form of deregulation and establishment and development of stock markets can be expected to lead to enhanced economic growth.

A NOTE ON INFLATION, ECONOMIC GROWTH, AND INCOME INEQUALITY

2009 ◽  
Vol 13 (1) ◽  
pp. 138-147 ◽  
Author(s):  
Yi Jin
Keyword(s):  
Economic Growth ◽  
Growth Rate ◽  
Income Inequality ◽  
Endogenous Growth ◽  
Money Growth ◽  
Relative Importance ◽  
Long Run ◽  
Endogenous Growth Model ◽  
The Relationship ◽  
Negative Growth

This paper develops a monetary endogenous growth model with capital and skill heterogeneity to analyze the relationship among inflation, growth, and income inequality. In the model inflation, growth, and inequality are jointly determined. We show that an increase in the long-run money growth rate raises inflation and reduces growth, but its effect on income inequality depends on the relative importance of the two types of heterogeneity. Inequality shrinks with the rise of inflation when capital heterogeneity dominates and enlarges when skill heterogeneity dominates. Therefore, our model supports a negative (positive) inflation–inequality relationship and a positive (negative) growth–inequality relationship when capital (skill) heterogeneity dominates. In any event, inflation and growth are negatively related.

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