Download or read book The Direction of Causality Between Financial Development and Economic Growth written by César Calderón and published by . This book was released on 2002 with total page 30 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book The Direction of Causality Between Financial Development and Economic Growth in Tanzania An Empirical Analysis written by Erasmus Hyera and published by . This book was released on 2016 with total page 27 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper examines causality relationship between financial development and economic growth in Tanzania over the period 1980 to 2012. In time series context, recently econometric techniques were used; namely Augmented Dickey and Fuller test (ADF) for unit roots test, Johansen test for Co-intergration test, Vector error correction model (VECM) tested for short run and long run causality, a pairwise Granger causality test used to establish the direction of causality and Variance decomposition (VD) under VAR framework applied for validating strengths of findings outside the estimated sampling period. In overall empirical findings can be summarized as follows. Firstly, there is long-run relationship between financial development and economic growth. Secondly, granger causality test suggests economic growth causes financial development in a short-run when broad money to nominal GDP and liquidity liability to nominal GDP used, however when credit to private sector to nominal GDP was used findings confirmed evidence of bidirectional causality between financial development and economic growth, and in a long-run causality run only from Economic growth to financial development even in outside the estimated sampling period. Thirdly, financial sector has been effective in promoting economic growth in a short run only and economic growth variable was the most exogenous leading variable than others suggesting, financial sector has played little role in promoting economic growth in Tanzania. Lastly, capital accumulation channel via gross domestic investments to nominal GDP links financial development and economic growth in a short run only, suggesting long-term financial infrastructures that are necessary for successful promoting investments for spurring economic growth still remain weak in Tanzania. These findings are contrary to the convectional results favored only supply view. Although study has confirmed mixed results on the direction of causality between financial development and economic growth in Tanzania, in view of feedback effect results, study recommend more efforts should be devoted to the deepening of financial sector by enhancing competition, improving business environment, investing on human resources and legal environment.
Download or read book The Direction of Causality Between Financial Development and Economic Growth written by Erdal Demirhan and published by . This book was released on 2016 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: In this paper we investigate the causality relationship between financial development and economic growth using available data from 1987:1 to 2006:04 about Turkey. We take total bank credit to private sector and total market capitalization as proxies for financial development and GDP as proxy for economic growth. In this context, Vector Error Correction Model and Impulse Response Functions (IRF) are used to explain possible casual relationships between variables. Empirical findings suggest that there is a bidirectional causality relationship between variables. While the development of the stock market and banking sector has caused economic growth, economic growth has also been brought about by stock market and banking sector developments in Turkey over the same period. Moreover, the contribution of the banking sector to economic growth has been larger than that of the stock market.
Download or read book Financial Development and Economic Growth written by Mr.Pablo Emilio Guidotti and published by International Monetary Fund. This book was released on 1992-12-01 with total page 38 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper examines the empirical relationship between long–run growth and the degree of financial development, proxied by the ratio of bank credit to the private sector as a fraction of GDP. We find that this proxy enters significantly and with a positive sign in growth regressions on a large cross–country sample, but with a negative sign using panel data for Latin America. Our findings suggest that the main channel of transmission from financial development to growth is the efficiency of investment, rather than its volume. We also present a model where the negative correlation between financial intermediation and growth results from financial liberalization in a poor regulatory environment.
Download or read book Economic Growth and Financial Development written by Muhammad Shahbaz and published by Springer Nature. This book was released on 2021-09-21 with total page 245 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book looks into the relationship between financial development, economic growth, and the possibility of a potential capital flight in the transmission process. It also examines the important role that financial institutions, financial markets, and country-level institutional factors play in economic growth and their impact on capital flight in emerging economies. By presenting new theoretical insights and empirical country studies as well as econometric approaches, the authors focus on the relationship between financial development and economic growth with capital flight in the era of financial crisis. Therefore, this book is a must-read for researchers, scholars, and policy-makers, interested in a better understanding of economic growth and financial development of emerging economies alike.
Download or read book Financial Development and Poverty Reduction written by Sylviane Guillaumont Jeanneney and published by International Monetary Fund. This book was released on 2008-03 with total page 42 pages. Available in PDF, EPUB and Kindle. Book excerpt: This article investigates how financial development helps to reduce poverty directly through the McKinnon conduit effect and indirectly through economic growth. The results obtained with data for a sample of developing countries from 1966 through 2000 suggest that the poor benefit from the ability of the banking system to facilitate transactions and provide savings opportunities but to some extent fail to reap the benefit from greater availability of credit. Moreover, financial development is accompanied by financial instability, which is detrimental to the poor. Nevertheless, the benefits of financial development for the poor outweigh the cost.
Download or read book Financial Development and Economic Growth written by C. Goodhart and published by Springer. This book was released on 2004-06-13 with total page 248 pages. Available in PDF, EPUB and Kindle. Book excerpt: The most successful economies have the best working financial markets. While causation obviously runs in both directions, current research has increasingly emphasized the role of finance in promoting growth. Here seven leading financial economists explore the links between financial development and growth. The book seeks to answer the question of the role of finance in promoting sustainable growth and in the reduction of poverty, for example via micro-financial institutions.
Download or read book The Relationship Between Financial Development and Economic Growth written by Min Kok Seet and published by . This book was released on 2010 with total page 259 pages. Available in PDF, EPUB and Kindle. Book excerpt: The study of the causal relationship between financial development and economic growth has been a topic of keen interests and controversy. Past studies provide mixed evidence on the direction of causality in the finance-growth nexus. This thesis examines the relationship between financial development and economic growth in Singapore. As a longitudinal study, it also examines whether the finance-growth relationship changes over time, particularly when subjected to major shocks. The research employs vector auto-regression analysis on time-series data over the period 1978-2006, with in-depth analyses in the sub-periods 1978-1996 and 1998-2006 which are separated by the 1997 Asian financial crisis. From the perspective of banking sector development, the study found negative bi-directional causality between banking activities and economic growth in Singapore, with the finance-growth nexus becoming more volatile after being subjected to major shocks such as the 1997 Asian financial crisis. From the perspective of stock-market development, the study indicated positive bi-directional causality between stock-market activities and economic growth in Singapore, with the mutually beneficial linkages between the stock-market and the real economy becoming less persistent after the 1997 Asian financial crisis. The implications of the results for theory and policy are discussed and areas for further research are also highlighted.
Download or read book Finance Growth Nexus Evidence from Indian Economy using Causality Co Integration Test based on Error Correction Model written by Manoj Dora and published by GRIN Verlag. This book was released on 2009-10-26 with total page 71 pages. Available in PDF, EPUB and Kindle. Book excerpt: Master's Thesis from the year 2009 in the subject Business economics - General, grade: A, Vanderbilt University (Graduate Program in Economic Development), course: Masters in Economics, language: English, abstract: This study explores the relationship between financial growth and economic development in India using time series data over the period 1950-2007. The majority of the previous studies on this subject have used cross-sectional data, which may not address country specific issues. In addition, many studies used either OLS technique of estimation or bi-variate causality test and may, therefore suffer from the omission-of variable bias. This study attempts to examine the dynamic relationship between financial growth and economic development by including a range of financial variables like, quasi money for monetization, domestic credit for financial intermediation activities and bank asset for financial intermediary institutions. The casual relationship between economic development and financial growth indicators was examined with the help of Granger-Causality procedure based on Unrestricted Vector Auto Regression using the error correction term. The result from the cointegration tests indicates that financial development has a long-run equilibrium with economic growth. The financial sector and real sector move and evolve together in the same direction. The error correction model suggests that, in the short-run, the output variable is the only effective adjustment factor in the system that responds to the fluctuations of financial measures and domestic capital formation. On the other hand, the response of financial intensities and investments are sluggish adjustments that correct the deviation from equilibrium. In nutshell, this study shows that India’s financial development and economic growth are positively correlated; the process of economic development is not sustainable without the contributions of the financial sector and vice versa.
Download or read book The Character of the State in Financial Development and Economic Growth written by Godfrey Chidozie Uzonwanne and published by . This book was released on 2011 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This study involved an analysis of how the character of a state inadvertently defines the trajectory of financial development of the state and its resultant impact/causality on economic growth. The guiding theme here is that the finance growth theory (Schumpeter 1911, Goldsmith 1969) has its fundamental root in the demographics of western economies with proven functional and stable political and social institutions. The direct applicability of this theory to the explanation of financial and macroeconomic phenomena in developing economies with a unique set of distinct characters may prove erroneous. To analyse this assertion, a developing economy (Nigeria) which had experienced decades of autocratic military governance was studied using a mixed method research design to gather and analyse data. Under this approach, triangulation of three data sources was achieved to augment for the problem of reliability of data sources. A historical case review was conducted using secondary data. This was followed by an econometric analysis to determine the direction of causality of financial development on economic growth applying the vector co-integration analysis and the Granger Causality test using time series data relating to Real GDP Per Capita, Size, Activity and Efficiency of Financial Intermediaries and the Stock Market in Nigeria and dummy variables to represent socio-political characters identified from the historical analysis. Finally, primary data was generated by questionnaire and group interview as a means of validating the findings from the historical case review and the econometric analysis as well as completing the triangulation of data sources. The historical review revealed three major characters represented by ethnicity in which prebendalism was strongly inherent, social unrest culminating in a three year long civil war and persistence of autocratic military governance and civilian democracies tutored by military dictators while the econometric analysis revealed the presence of macroeconomic structures identifying at least one co-integrating vector but the causality test showed no indication of causality between financial development and economic growth irrespective of steadily rising annual figures for Real GDP Per Capita and indicators of positive financial development. It was concluded that the character of a state in developing economies whose characters form a unique parabola of activities that are not prevalent in western democracies where this theory finds its origin is an endogenous variable in determining the impact of financial development on economic growth.
Download or read book Financial Development and Output Growth written by Ramesh K. Adhikari and published by . This book was released on 2009 with total page 138 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Nouvelles Formes de Lamiaires 16 written by and published by . This book was released on 1964 with total page 8 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Financial Structure and Economic Growth written by Aslı Demirgüç-Kunt and published by MIT Press. This book was released on 2001 with total page 452 pages. Available in PDF, EPUB and Kindle. Book excerpt: CD-ROM contains: World Bank data.
Download or read book Finance and Growth written by Ross Levine and published by . This book was released on 2004 with total page 130 pages. Available in PDF, EPUB and Kindle. Book excerpt: "This paper reviews, appraises, and critiques theoretical and empirical research on the connections between the operation of the financial system and economic growth. While subject to ample qualifications and countervailing views, the preponderance of evidence suggests that both financial intermediaries and markets matter for growth and that reverse causality alone is not driving this relationship. Furthermore, theory and evidence imply that better developed financial systems ease external financing constraints facing firms, which illuminates one mechanism through which financial development influences economic growth. The paper highlights many areas needing additional research"--NBER website
Download or read book Too Much Finance written by Mr.Jean-Louis Arcand and published by International Monetary Fund. This book was released on 2012-06-01 with total page 50 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper examines whether there is a threshold above which financial development no longer has a positive effect on economic growth. We use different empirical approaches to show that there can indeed be "too much" finance. In particular, our results suggest that finance starts having a negative effect on output growth when credit to the private sector reaches 100% of GDP. We show that our results are consistent with the "vanishing effect" of financial development and that they are not driven by output volatility, banking crises, low institutional quality, or by differences in bank regulation and supervision.
Download or read book An Empirical Reassessment of the Relationship Between Finance and Growth written by Mr.Giovanni Favara and published by International Monetary Fund. This book was released on 2003-06-01 with total page 48 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper reexamines the empirical relationship between financial development and economic growth. It presents evidence based on cross-section and panel data using an updated dataset, a variety of econometric methods, and two standard measures of financial development: the level of liquid liabilities of the banking system and the amount of credit issued to the private sector by banks and other financial institutions. The paper identifies two sets of findings. First, in contrast with the recent evidence of Levine, Loayza, and Beck (2001), cross-section and panel-data-instrumental-variables regressions reveal that the relationship between financial development and economic growth is, at best, weak. Second, there is evidence of nonlinearities in the data, suggesting that finance matters for growth only at intermediate levels of financial development. Moreover, using a procedure appropriately designed to estimate long-run relationships in a panel with heterogeneous slope coefficients, there is no clear indication that finance spurs economic growth. Instead, for some specifications, the relationship is, puzzlingly, negative.
Download or read book Financial Development and Economic Growth in Cote D Ivoire written by Denis Foade and published by GRIN Verlag. This book was released on 2011-03 with total page 29 pages. Available in PDF, EPUB and Kindle. Book excerpt: Scientific Study from the year 2011 in the subject Economics - Economic Cycle and Growth, grade: none, Universit de Cocody, Abidjan (The UFR of Economics and Management), course: Teacher's publication, language: English, abstract: The present paper analyzes theoretically and empirically the link between financial development and economic growth in the Ivorian economy. To that end, the contribution of financial development to economic growth is assessed through the broad money (M2) as percentage of GDP ratio (M2/GDP), private credit on domestic credit (CE/CI), liquid liability of out of gross domestic product (DQM/M2), indicating the banking system's expansion in the mobilization of saving. The analysis is carried through a VAR model. Key words: Financial development, Economic growth, Velocity of money, risk. JEL Classification: C32, F41, F43
