Panel analysis of relationship between financial development and economic growth
Yükleniyor...
Dosyalar
Tarih
2016
Yazarlar
Dergi Başlığı
Dergi ISSN
Cilt Başlığı
Yayıncı
Erişim Hakkı
info:eu-repo/semantics/openAccess
Özet
The aim of this paper is to provide empirical evidence on the relationship between financial
development and economic growth and to examine whether there are differences in the size of the
impact of financial development on economic growth in countries with different income levels.
Furthermore, the impact of additional determinants of economic growth is analyzed. Research
problem is lack of empirical evidence on the relationship between financial development and
economic growth when financial development is measured by proxy variables on banks and stock
markets; low treatment of potential endogeneity problem as well as lack of empirical evidence on
the differences in the size of the impact of financial development on economic growth in
countries with different income levels. Balanced panel data for 94 countries during the period
between 1992 and 2011 are used in this analysis. Five-year averaged data are used to reduce the
impact of business cycles and measurement errors. Six models are estimated by using panel fixed
and random effects models. However, the analysis indicates that distribution of error terms
deviates from normal; the assumption of homoscedasticity is rejected and the presence of
endogenous regressor is reported. Therefore, in order to overcome these issues, the dynamic onestep
system GMM estimator is used to estimate models. The obtained results indicate that
banking sector and stock market development have statistically significant positive impact on
economic growth. It has been shown that the impact of banking sector development strongly
contributes to economic growth compared to stock market development. Besides, the results
show that education has no statistically significant impact on economic growth while inflation,
government spending and trade openness have a negative impact. The sixth model indicates that
on average financial development strongly impacts economic growth in high and middle-income
countries compared to low-income countries, and that the strongest impact is obtained for highincome
countries. The results of this paper may motivate policy makers to foster the financial
development since it contributes to economic growth. Since financial development contributes to
Açıklama
Anahtar Kelimeler
Economic growth, Financial development, Generalized method of moments, Panel analysis
Kaynak
Book of Abstracts and Conference Proceedings
WoS Q DeÄŸeri
Scopus Q DeÄŸeri
Cilt
Sayı
Künye
Satrovic, Elma, Resic, Emina, Kapetanovic, Somun.Panel analysis of relationship between financial development and economic growth.Book of Abstracts and Conference Proceedings,247-262.
