Chicken or egg: financial development and economic growth in China, 1992-2004
AbstractThis paper contributes to the empirical finance-growth literature by examining the relationship between financial depth, banking sector development, stock market development and economic growth in China. After an extensive survey on recent financial reforms in China, we apply Granger (non-)causality tests for non-stationary variables to examine long-run and short-run causality between economic growth and financial development. We find positive relationships between financial depth, banking sector development and growth. However, stock market development does not seem to have a positive effect on long-run economic growth.
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Bibliographic InfoPaper provided by University of Groningen, CCSO Centre for Economic Research in its series CCSO Working Papers with number 200509.
Date of creation: 2005
Date of revision:
This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-05-27 (All new papers)
- NEP-CFN-2006-05-27 (Corporate Finance)
- NEP-CNA-2006-05-27 (China)
- NEP-DEV-2006-05-27 (Development)
- NEP-FDG-2006-05-27 (Financial Development & Growth)
- NEP-FMK-2006-05-27 (Financial Markets)
- NEP-SEA-2006-05-27 (South East Asia)
- NEP-TRA-2006-05-27 (Transition Economics)
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