The Fading Link? A New Empirical Analysis of the Relationship Between Financial Development and Economic Growth
AbstractThis paper contributes to the literature on the finance-growth link by presenting new findings based on a new, larger dataset that improves over earlier studies in its greater coverage in terms of time periods and countries, as well as the incorporation of additional control variables like institutional quality and the size of the economy. Our results demonstrate that financial development does not have a statistically significant effect on economic growth. We also find that the economy's size is a statistically significant determinant of growth.
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Bibliographic InfoPaper provided by Becker Friedman Institute for Research In Economics in its series Working Papers with number 2010-013.
Date of creation: Dec 2010
Date of revision:
financial development; economic growth; institutional quality; market size; dynamic panel analysis;
Find related papers by JEL classification:
- E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
- O16 - Economic Development, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
- O43 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth
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