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
20.09.2024, 08:21 MESZ

Datenpartner

Dieses Objekt wird bereitgestellt von:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.

Objekttyp

  • Arbeitspapier

Beteiligte

  • Samargandi, Nahla
  • Fidrmuc, Jan
  • Ghosh, Sugata
  • Center for Economic Studies and ifo Institute (CESifo)

Entstanden

  • 2014

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