Arbeitspapier
Is the Relationship between Financial Development and Economic Growth Monotonic? Evidence from a Sample of Middle Income Countries
We revisit the relationship between financial development and economic growth in a panel of 52 middle income countries over the 1980-2008 period, using pooled mean group estimator in a dynamic heterogeneous panel setting. We show that financial development does not have a linear positive long-run impact on economic growth in this sample. When we consider a non-linear relationship between financial development and growth, we find an inverted U-shaped relationship between finance and growth in the long run. In the short-run, the relationship is insignificant. This finding suggests that middle income countries face a threshold point after which financial development no longer contributes to economic growth.
- Sprache
-
Englisch
- Erschienen in
-
Series: CESifo Working Paper ; No. 4743
- Klassifikation
-
Wirtschaft
Single Equation Models; Single Variables: Panel Data Models; Spatio-temporal Models
Macroeconomic Analyses of Economic Development
Economic Development: Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
- Thema
-
financial development
economic growth
heterogeneous panels
pooled mean group estimation
non-monotonicity
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Samargandi, Nahla
Fidrmuc, Jan
Ghosh, Sugata
- Ereignis
-
Veröffentlichung
- (wer)
-
Center for Economic Studies and ifo Institute (CESifo)
- (wo)
-
Munich
- (wann)
-
2014
- Handle
- Letzte Aktualisierung
-
10.03.2025, 11:43 MEZ
Datenpartner
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Objekttyp
- Arbeitspapier
Beteiligte
- Samargandi, Nahla
- Fidrmuc, Jan
- Ghosh, Sugata
- Center for Economic Studies and ifo Institute (CESifo)
Entstanden
- 2014
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