Empirical evidence is increasing by emphasizing the positive influence of financial markets on the level and the rate of growth of a country's per-capita income. Theoretically, the rationale for the finance-growth nexus appears to be straightforward: in imperfect economies, financial markets provide valuable services such as mobilizing savings, diversifying risks, allocating savings to investments and monitoring the allocation of managers. By performing these services financial markets work as a very important catalyst of economic growth. Empirical research has so far paid little attention to the mechanisms through which financial development is related to growth. Using a panel data set covering 22 OECD countries over the period 1970 through 2000, we present empirical evidence which suggest that the finance-growth nexus in industrialized countries is due to a higher degree of specialization made possible by financial advancement.
Download Info
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. In case of further problems read
the IDEAS help
file. Note that these files are not on the IDEAS
site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Did you know? You can create a compilation of all publications of a group of people, say alumni of a program, your students or memers of an association.