Bank-based and market-based development and economic growth: an international investigation

2019 ◽  
Vol 36 (3) ◽  
pp. 365-394 ◽  
Author(s):  
Isaac Boadi ◽  
Daniel Osarfo ◽  
Perpetual Boadi
Keyword(s):  
Economic Growth ◽  
Financial Development ◽  
Method Of Moments ◽  
Design Methodology ◽  
Generalized Method Of Moments ◽  
Fixed Effect ◽  
Relative Impact ◽  
Content Type ◽  
Regional Effects ◽  
Development Policies

Purpose The purpose of this paper is to investigate the relative impact of bank-based and market-based financial developments on economic growth from 1984 to 2015, using 60countries. Design/methodology/approach This study uses fixed effect and generalized method of moments (GMM) to investigate the relative impact of bank-based and market-based financial developments on economic growth from 1984 to 2015, using 60 countries. The study further controls regional effects and the Asian crisis, as well as the global economic crisis. Findings The empirical results of the study revealed that market-based development positively affects economic growth. Besides, market-based financial development indirectly promotes investment, which has the potential to strongly enhance growth. The findings of this study, therefore, provide more support to pro-market-based financial development policies in these regions. Interestingly, bank-based development has no direct impact on development, but indirectly encourages investment, which also promotes growth. Originality/value This paper is the first of its kind to empirically examine fixed effect and GMM to investigate the relative impact of bank-based and market-based financial developments on economic growth from 1984 to 2015, using 60 countries.

Financial development, human capital and its impact on economic growth of emerging countries

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Aaqib Sarwar ◽  
Muhammad Asif Khan ◽  
Zahid Sarwar ◽  
Wajid Khan
Keyword(s):  
Economic Growth ◽  
Human Capital ◽  
Financial Development ◽  
Emerging Economies ◽  
Generalized Method Of Moments ◽  
Emerging Countries ◽  
Data Set ◽  
Content Type ◽  
The World ◽  
The Impact

Purpose This paper aims to investigate the critical aspect of financial development, human capital and their interactive term on economic growth from the perspective of emerging economies. Design/methodology/approach Data set ranged from 2002 to 2017 of 83 emerging countries used in this research and collected from world development indicators of the World Bank. The two-step system generalized method of moments is used to conduct this research within the endogenous growth model while controlling time and country-specific effects. Findings The findings of the study indicate that financial development has a positive and significant effect on economic growth. In emerging countries, human capital also has a positive impact on economic growth. Financial development and human capital interactively affect economic growth for emerging economies positively and significantly. Research limitations/implications The data set is limited to 83 emerging countries of the world. The time period for the study is 2002 to 2017. Originality/value This research contributes to the existing literature on human capital, financial development and economic growth. Limited research has been conducted on the impact of financial development and human capital on economic growth.

Franchising and value signaling

2014 ◽  
Vol 28 (2) ◽  
pp. 105-115 ◽  
Author(s):  
Laura Lucia-Palacios ◽  
Victoria Bordonaba-Juste ◽  
Melih Madanoglu ◽  
Ilan Alon
Keyword(s):  
Method Of Moments ◽  
Support Services ◽  
Design Methodology ◽  
Generalized Method Of Moments ◽  
Financial Assistance ◽  
Content Type ◽  
Contractual Arrangements ◽  
Using Data ◽  
New Evidence ◽  
Area Development

Purpose – The purpose of this paper is to demonstrate how signaling support services and contractual arrangements that create value for incumbent franchisees can help to create value for the whole network by attracting prospective franchisees. Design/methodology/approach – Using data from Bond's Franchising Report the study analyses franchisors operating between 1994 and 2008 via a Generalized Method of Moments (GMM) model for an unbalanced panel of 2,474 franchisors. Findings – Training, financial assistance, sub-franchising and restrictions against passive ownership, and the use of area development agreements are found to be valuable for prospective franchisees. Experience and the number of company-owned and franchised units also attract prospective franchisees. Research limitations/implications – Our findings imply that not all value-creating services and contractual arrangements are interpreted in the same way by prospective franchisees. Franchisors should offer training and financial assistance to new franchisees in the early stages of a franchise. They should also allow sub-franchising but restrict passive ownership and offer the possibility for area development agreements as contractual arrangements to appeal to new franchisees. Franchisors should focus not only on expansion, but should view the chain in a holistic manner by sustaining and growing both franchised and company-owned units. Originality/value – The findings contribute to the franchising literature by providing new evidence on how offering and signaling some contractual arrangements and support services can help franchisors create value for incumbent franchisees and can attract new franchisees. Our research shows that value in franchising is created differently depending on whether the franchisees are incumbent or prospective.

Economic growth and market-based financial systems: a review

2015 ◽  
Vol 32 (2) ◽  
pp. 235-255 ◽  
Author(s):  
Sheilla Nyasha ◽  
N.M. Odhiambo
Keyword(s):  
Economic Growth ◽  
Developing Countries ◽  
Causal Relationship ◽  
Financial Development ◽  
Design Methodology ◽  
Data Sets ◽  
Financial Systems ◽  
Content Type ◽  
The Relationship ◽  
Country Specific

Purpose – This paper aims to survey the existing literature on the causal relationship between market-based financial development and economic growth – in both developed and developing countries, highlighting the theoretical and the empirical evidence. Design/methodology/approach – The paper divides financial development into bank-based and market-based financial development, and it closely reviews the international literature on the relationship between market-based financial development and economic growth. Findings – The direction of causality between market-based financial development and economic growth varies from one country to another, depending on various country-specific characteristics, data sets and the methodology used by the researcher. On balance, there is predominant support for the supply-leading response, where the development of the market-based financial sector is expected to precede the development of the real sector. Originality/value – This review differs fundamentally from previous reviews, in that it divides financial development into bank-based and market-based financial development, and it focuses closely on market-based financial development and economic growth. The majority of the previous studies on this subject failed to make such a distinction, thereby focusing mainly on the general causal relationship between the overall financial development and economic growth. To the best of the authors' knowledge, this may be the first review of its kind to survey the existing research in detail on the causal relationship between market-based financial development and economic growth, in both developed and developing countries.

How does working capital management affect the profitability of Indian companies?

2018 ◽  
Vol 15 (3) ◽  
pp. 347-366 ◽  
Author(s):  
Nufazil Altaf ◽  
Farooq Ahmad Shah
Keyword(s):  
Method Of Moments ◽  
Design Methodology ◽  
Generalized Method Of Moments ◽  
Capital Management ◽  
Working Capital ◽  
Working Capital Management ◽  
Content Type ◽  
Firm Profitability ◽  
Potential Problems ◽  
The Relationship

Purpose The purpose of this paper is to examine the relationship between working capital management (WCM) and firm profitability for a sample of 437 non-financial Indian companies. Design/methodology/approach The study is based on secondary financial data obtained from Capitaline database, pertaining to a period of ten years. This study employs two-step generalized method of moments (GMM) techniques to arrive at results. Findings The results of the study confirm the inverted U-shape relationship between WCM and firm profitability. In addition, the authors also found that the firms should complete its CCC on an average by 63 days. Originality/value Unlike prior studies that found a linear relationship between WCM and firm profitability. This study provides newer evidence for an inverted U-shaped relation between investment in working capital and firm profitability in India. In addition, this study uses GMM to control the potential problems of endogeneity.

Tackling post-pandemic challenges with digital technologies: an empirical study

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Syed Abdul Rehman Khan ◽  
Zhang Yu ◽  
Muhammad Umar ◽  
Ana Beatriz Lopes de Sousa Jabbour ◽  
Rahul S. Mor
Keyword(s):  
Method Of Moments ◽  
Environmental Sustainability ◽  
Design Methodology ◽  
Fossil Fuel ◽  
Rate Increase ◽  
Generalized Method Of Moments ◽  
Digital Technologies ◽  
Content Type ◽  
Advanced Technologies ◽  
The Impact

PurposeThis study aims to examine the impact of Covid-19 on social and eco-environmental sustainability. It will also investigate the effect of advanced technologies in the post-pandemic era.Design/methodology/approachTo get the robust findings, GMM (Generalized Method of Moments) modeling is employed on the panel data of 50 countries across the globe.FindingsThe outcomes indicate that gross fixed capital, logistical operations, knowledge spillover are positive, while Covid-19 is negatively associated with international trade. The results also revealed that Covid-19 spurs poverty and vulnerable employment, while the fertility rate increase creates pressure on economic growth. Also, fossil fuel and energy consumption contribute to carbon emission, while green and advanced technologies may mitigate the environment's adverse effects.Originality/valueThis study is the first of its kind to provide a solution to the challenges posed by the Covid-19 pandemic in the post-pandemic environment. Furthermore, researchers, managers and legislators can use this article's findings to formulate relevant policies for post-pandemic.

The employment effects of offshoring: evidence from Korean manufacturing

2016 ◽  
Vol 20 (1) ◽  
pp. 21-34
Author(s):  
Sang-Chul Yoon
Keyword(s):  
Panel Data ◽  
Method Of Moments ◽  
Design Methodology ◽  
Generalized Method Of Moments ◽  
Employment Relationship ◽  
Content Type ◽  
Trade Specialization ◽  
Employment Effects ◽  
Negative Effect ◽  
First Time

Purpose – The purpose of this paper is to analyze the offshoring-employment relationship under globalization in Korean manufacturing for the period from 1998 to 2010 using industry-level panel data and Generalized Method of Moments. Design/methodology/approach – For the first time in the literature the type of trade specialization is taken into account, distinguishing manufacturing between export-specialized and import-specialized industries. Findings – There is evidence that materials and services offshoring have a significantly negative effect on employment in export-specialized industries. In contrast, there is a non-significant association in import-specialized industries. Research limitations/implications – These results may cast new light on the offshoring-employment relationship. Originality/value – Major contribution of this paper is that it sheds new light on the effect of offshoring on employment by distinguishing export-specialized industries from import-specialized industries.

Government expenditure and economic growth nexus in ECOWAS countries

2019 ◽  
Vol 36 (3) ◽  
pp. 204-225 ◽  
Author(s):  
Olumide Olusegun Olaoye ◽  
Monica Orisadare ◽  
Ukafor Ukafor Okorie
Keyword(s):  
Economic Growth ◽  
Causal Relationship ◽  
Method Of Moments ◽  
Panel Data Analysis ◽  
Generalized Method Of Moments ◽  
Government Expenditure ◽  
West African ◽  
Economic Data ◽  
Content Type ◽  
Vector Autoregressive

Purpose The purpose of this paper is to examine the direction of causality between government expenditure and economic growth in the Economic Community of West African States (ECOWAS) countries. Design/methodology/approach The study adopts the recently developed panel vector autoregressive (PVAR) by Love and Abrrigo (2015) and two-step system generalized method of moments (GMM) in order to resolve the inherent problems of endogeneity and persistence in economic data. Findings The results from the study show no evidence of either unidirectional or bidirectional causal relationship between government expenditure and economic growth in ECOWAS member countries. Originality/value Unlike previous studies that adopted cointegration technique, we adopt a system GMM through the application of a dynamic PVAR framework within the framework of panel data analysis in order to address the possibility of feedback effect in the causal relationship between government expenditure and economic growth. In addition the PVAR also allows us to model shocks across countries.

Bank-based financial development and economic growth

2014 ◽  
Vol 6 (2) ◽  
pp. 112-132 ◽  
Author(s):  
Sheilla Nyasha ◽  
Nicholas M Odhiambo
Keyword(s):  
Economic Growth ◽  
Developing Countries ◽  
Empirical Evidence ◽  
Causal Relationship ◽  
Financial Development ◽  
Design Methodology ◽  
Prima Facie ◽  
Content Type ◽  
Clear Cut ◽  
Finance Growth Nexus

Purpose – The purpose of this paper was to survey the existing literature on the causal relationship between bank-based financial development and economic growth, highlighting the theoretical and empirical evidence from recent work. Although some previous studies have attempted to conduct a survey of the existing research on the finance-growth nexus, the majority of these studies have failed to distinguish between bank-based and market-based financial developments. To our knowledge, this may be the first study of its kind to survey the existing research on the causal relationship between bank-based financial development and economic growth – in both developed and developing countries. Design/methodology/approach – Overall, our study shows that most of the literature reviewed in this paper either supports bidirectional causality between bank-based financial development and economic growth or reinforces the conventional supply-leading response phenomenon. Notwithstanding this outcome, the study also finds the literature in favour of a demand-following response to be increasing – in both number and substance – especially in recent years. Findings – The paper, therefore, concludes that the causal relationship between financial development and economic growth is not clear-cut and that the notion that financial development automatically leads to economic growth is merely based on prima facie or superficial evidence. Originality/value – Although some previous studies have attempted to conduct a survey of the existing research on the finance-growth nexus, the majority of these studies have failed to distinguish between bank-based and market-based financial developments. To our knowledge, this may be the first study of its kind to survey the existing research on the causal relationship between bank-based financial development and economic growth – in both developed and developing countries.

Determinants of bank profitability in Tunisia: does corruption matter?

2017 ◽  
Vol 20 (1) ◽  
pp. 70-78 ◽  
Author(s):  
Khemaies Bougatef
Keyword(s):  
Method Of Moments ◽  
Commercial Banks ◽  
Design Methodology ◽  
Generalized Method Of Moments ◽  
Surprising Result ◽  
Bank Profitability ◽  
Content Type ◽  
Method Of Moments Estimator ◽  
Asset Quality ◽  
High Level

Purpose In this paper, the author aims to examine the effect of perceived level of corruption on bank profitability. Design/methodology/approach The analysis is based on a balanced panel of ten commercial banks in Tunisia over the period 2003-2014. The author uses the generalized method of moments estimator technique described by Arellano and Bover (1995). Findings The author finds a positive relationship between the bank profitability and the corruption level. This surprising result suggests that Tunisian commercial banks take advantage from the high level of corruption. Regarding the others determinants, the findings reveal that bank profitability is positively related to capitalization level and liquidity. By contrast, a low asset quality is associated with low profitability. Originality/value The novelty of this study consists in the inclusion of the corruption level as a determinant of bank profitability.

Culture based development: empirical evidence from Shilpgram Fair, Rajasthan

2015 ◽  
Vol 7 (4) ◽  
pp. 393-402 ◽  
Author(s):  
Shweta Tiwari
Keyword(s):  
Economic Growth ◽  
Empirical Evidence ◽  
Financial Development ◽  
Design Methodology ◽  
Tourism Development ◽  
Secondary Data ◽  
Rural Life ◽  
Content Type ◽  
Group Association

Purpose – The purpose of this paper is to investigate the role of culture in economic growth in areas where the Shilpgram fair is facilitated in Rajasthan. Design/methodology/approach – The data are acquired through primary and secondary data with individual meetings, interviews and questionnaires. Findings – The study uncovered that the Shilpgram fair is expanding mindfulness and financial development of rural life and crafts particularly for younger people. Originality/value – This study presents recognition of the financial effects of tourism on neighbouring group association in tourism development.

Sign in / Sign up

Export Citation Format

Share Document