scholarly journals The Role of Bank-based and Market-based Financial Development on Economic Growth of Nepal

2019 ◽  
Vol 12 (1) ◽  
pp. 5-26
Author(s):  
Surya Bahadur Rana
Keyword(s):  
Economic Growth ◽  
Stock Market ◽  
Banking Sector ◽  
Empirical Relationship ◽  
Stock Market Development ◽  
Study Results ◽  
Endogenous Growth Model ◽  
Banking Development ◽  
Shed Light

This study examines the empirical relationship between economic growth and various measures of stock market and banking development in Nepal over the sample period 1987/88 to 2015/16 using a framework of endogenous growth model suggested by Romer (1986), Rebelo (1991) and Pagano (1993). The study finds that stock market size, liquidity and banking development measures predict the economic growth in the context of Nepal. Similarly, the study results show the important role of banking development on economic growth process of Nepal because all indicators of banking development have positive and significant impact on growth. The study results shed light on the fact that both the level of stock market development and the level of banking development can influence the economic growth of Nepal. This finding supports the notion of Levine (1996) which articulates that stock market and banking sector are independently as well as jointly significant in promoting economic growth.  

scholarly journals Financial development, openness in financial services trade and economic growth

2019 ◽  
Vol 3 (2) ◽  
pp. 42-65 ◽  
Author(s):  
Rabia Khatun ◽  
Jagadish Prasad Bist
Keyword(s):  
Economic Growth ◽  
Stock Market ◽  
Financial Development ◽  
Financial Services ◽  
Banking Sector ◽  
Market Development ◽  
Services Trade ◽  
Content Type ◽  
Stock Market Development ◽  
Insurance Sector

Purpose The purpose of this paper is to examine the relationship between financial development, openness in financial services trade and economic growth in BRICS countries for the period 1990–2012. Design/methodology/approach An index for financial development has been constructed using principal component analysis technique by including banking sector development, stock market development, bond market development and insurance sector development. For the robustness of the result, the long-run cointegrating relationship amongst the variables has been analyzed. Findings Overall financial development has a positive and significant impact on economic growth. To take the full advantage of openness in financial services trade, countries need to put more emphasis on the development of their stock markets, bond markets and the insurance sector. The result shows that openness in financial services trade has a positive impact on economic growth when the stock market, bond market and insurance sector are included in the system. Research limitations/implications The policy implication of the findings is that policymakers should focus more on developing all four areas of finance to get the full benefit of the financial system on the process of economic growth. Originality/value The authors have constructed the better indicators of financial development in the case of BRICS economies. Most of the studies in BRICS economies have measured the development of the financial sector as either banking sector development or stock market development. However, the present study includes all four areas of finance (banking sector development, stock market development, insurance sector development and bond market development) into account.

scholarly journals HUBUNGAN ANTARA KORUPSI DENGAN PERKEMBANGAN PASAR SAHAM DAN PERBANKAN: KAJIAN EMPIRIS PADA SEMBILAN NEGARA DIKAWASAN ASEAN+3

2017 ◽  
Vol 15 (1) ◽  
pp. 1
Author(s):  
Muhammad Fazri ◽  
Hermanto Siregar ◽  
Heni Hasanah
Keyword(s):  
Economic Growth ◽  
Economic Development ◽  
Panel Data ◽  
Stock Market ◽  
Financial Institutions ◽  
Development Process ◽  
Institutional Influences ◽  
Banking Development ◽  
Macroeconomic Stability

Banking and stock market are two financial institutions which play an important role in the economic development process. Many studies suggest that the development of banking and stock market are able to increase the economic growth. There are factors which influence the development of these two financial institutions, for example macroeconomic stability and institutional influences such as corruption. This study aims to analyze how corruption affects the development of banking and stock market and also tries to identify the role of development of banking to reduce corruption. This study uses panel data for nine countries of ASEAN +3 region, during 2003-2012. The result shows that corruption hinders the development of banking and stock market. In addition, banking development will reduce corruption.

Financial Infrastructure and Economic Growth

2020 ◽  
pp. 329-358
Author(s):  
Saptarshi Chakraborty
Keyword(s):  
Economic Growth ◽  
Goodness Of Fit ◽  
Contemporary Literature ◽  
Empirical Relationship ◽  
Real Sector ◽  
Long Run ◽  
Endogenous Growth Model ◽  
Financial Infrastructure ◽  
Short Run

This chapter attempts to explore both a theoretical and empirical relationship between financial infrastructure and real sector of the Indian economy. It first presents an endogenous growth model where economic growth, proxied by the incremental output-capital ratio, depend on the financial infrastructure through three routes, namely, by changing the quantity of investible resources or by affecting the efficiency of utilization of a given quantity of resources or both, of which the former can either be through change in the amount of savings channeled to investment or change in the rate of savings. A time-series econometric analysis shows that the financial sector variables can explain near about 96% of the changes in real economic growth in India, which is an excellent goodness of fit. It concludes that the development of the financial infrastructure helps the Indian real sector grow both in the short-run and in the long-run. Unlike contemporary literature that prescribes diminished role, our study suggests a greater role of the govt. to ensure long-run economic growth.

scholarly journals Exploring the causality between economic growth, financial development and inflation in sixteen high-income countries

2021 ◽  
Vol 22 (45) ◽  
Author(s):  
José Alberto Fuinhas ◽  
Matheus Koengkan ◽  
Matheus Belucio
Keyword(s):  
Economic Growth ◽  
Stock Market ◽  
Banking Sector ◽  
High Income ◽  
Market Development ◽  
Impulse Response Functions ◽  
Vector Autoregressive ◽  
Stock Market Development ◽  
Banking Sector Development ◽  
The Relationship

This paper examined the relationship between economic growth, inflation, stock market development, and banking sector development for a panel of sixteen high-income countries for the period from 2001 to 2016, by using the mechanism impulse response functions and Granger causality tests derived from a panel vector autoregressive model. The evidence of bidirectional causality between all variables in the model was found. Overall, feedback and supply-leading theories have been confirmed in the literature. A plus sign in the relationship between the development of the banking sector and the stock market with economic growth was found. Therefore, stock market development and banking sector development stimulate the economy.

Financial Infrastructure and Economic Growth

2017 ◽  
pp. 346-375
Author(s):  
Saptarshi Chakraborty
Keyword(s):  
Economic Growth ◽  
Goodness Of Fit ◽  
Contemporary Literature ◽  
Empirical Relationship ◽  
Real Sector ◽  
Long Run ◽  
Endogenous Growth Model ◽  
Financial Infrastructure ◽  
Short Run

This chapter attempts to explore both a theoretical and empirical relationship between financial infrastructure and real sector of the Indian economy. It first presents an endogenous growth model where economic growth, proxied by the incremental output-capital ratio, depend on the financial infrastructure through three routes, namely, by changing the quantity of investible resources or by affecting the efficiency of utilization of a given quantity of resources or both, of which the former can either be through change in the amount of savings channeled to investment or change in the rate of savings. A time-series econometric analysis shows that the financial sector variables can explain near about 96% of the changes in real economic growth in India, which is an excellent goodness of fit. It concludes that the development of the financial infrastructure helps the Indian real sector grow both in the short-run and in the long-run. Unlike contemporary literature that prescribes diminished role, our study suggests a greater role of the govt. to ensure long-run economic growth.

scholarly journals Bank Versus Stock Market Development in Brazil: An ARDL Bounds Testing Approach

2017 ◽  
Vol 12 (1) ◽  
pp. 7-21 ◽  
Author(s):  
Sheilla Nyasha ◽  
Nicholas M. Odhiambo
Keyword(s):  
Economic Growth ◽  
Regression Analysis ◽  
Stock Market ◽  
Financial Development ◽  
Banking Sector ◽  
Bounds Testing ◽  
Stock Market Development ◽  
Long Run ◽  
Short Run ◽  
The Impact

AbstractThis paper examines the impact of both bank-based and market-based financial development on economic growth in Brazil during the period from 1980 to 2012. To incorporate all of the aspects of financial development into the regression analysis, the study employs a method of means-removed average to construct both bank-based and market-based financial development indices. Based on the ARDL approach, the empirical results show that there is a positive relationship between market-based financial development and economic growth in Brazil in the long run, but not in the short run. The results also show that bank-based financial development in Brazil does not have a positive effect on economic growth. This applies irrespective of whether the regression analysis is conducted in the short run, or in the long run. The study, therefore, concludes that it is the stock market, rather than banking sector development, that drives long-run economic growth in Brazil.

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