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The Growth-Finance Nexus and European Integration. A Review of the Literature

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Author Info

  • Carettoni, A

    (Centro Europa Ricerche)

  • Manzocchi, S

    ()
    (University of Perugia)

  • Padoan, P.C.

    (University of Rome & International Monetary Fund)

Abstract

This paper presents a survey of the literature on the relationship between finance and growth and discusses the implications of this relationship for European integration. A first goal of this paper is to discuss the channels financial systems promote growth through. From a theoretical point of view two different approaches can be singled out. One, based on neo-classical theory, identifies markets as the most efficient financial system in the long run; a second one, assuming asymmetric information in credit markets, attributes to banks a key role also in the more advanced stages of development. Against this background, this paper offers a first look at the connections between the more recent developments in the growth finance literature and the new European integration framework. It also suggests that the peculiar, and often complex, features of the growth mechanism in Europe, may help to shed some light on more general issues addressed in the growth finance literature

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Bibliographic Info

Paper provided by United Nations University, Institute for New Technologies in its series EIFC - Technology and Finance Working Papers with number 5.

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Date of creation: 2001
Date of revision:
Handle: RePEc:dgr:unutaf:eifc01-5

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Web page: http://www.intech.unu.edu

Related research

Keywords: Finance; Economic Growth; European Integration; Literature Survey;

This paper has been announced in the following NEP Reports:

References

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  1. Nicola Cetorelli, 2001. "Banking Market Structure, Financial Dependence and Growth: International Evidence from Industry Data," Journal of Finance, American Finance Association, American Finance Association, vol. 56(2), pages 617-648, 04.
  2. Levine, Ross, 1996. "Financial development and economic growth : views and agenda," Policy Research Working Paper Series 1678, The World Bank.
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  4. Diamond, Douglas W, 1984. "Financial Intermediation and Delegated Monitoring," Review of Economic Studies, Wiley Blackwell, Wiley Blackwell, vol. 51(3), pages 393-414, July.
  5. Jean-Pierre DANTHINE & Francesco Giavazzi & Ernst-Ludwig von Thadden, 2000. "European Financial Markets After EMU: A First Assessment," FAME Research Paper Series, International Center for Financial Asset Management and Engineering rp13, International Center for Financial Asset Management and Engineering.
  6. Philip Arestis & Panicos O. Demetriades & Kul B. Luintel, 1997. "Financial Development and Economic Growth: the Role of Stock Markets," Keele Department of Economics Discussion Papers (1995-2001), Department of Economics, Keele University 97/05, Department of Economics, Keele University.
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  8. Takeo Hoshi & Anil Kashyap & David Scharfstein, 1990. "The Role of Banks in Reducing the Costs of Financial Distress in Japan," NBER Working Papers 3435, National Bureau of Economic Research, Inc.
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  11. La Porta, Rafael & Florencio Lopez-de-Silanes & Andrei Shleifer & Robert W. Vishny, 1997. " Legal Determinants of External Finance," Journal of Finance, American Finance Association, American Finance Association, vol. 52(3), pages 1131-50, July.
  12. Mayer, Colin, 1988. "New issues in corporate finance," European Economic Review, Elsevier, Elsevier, vol. 32(5), pages 1167-1183, June.
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  14. Raghuram G. Rajan & Luigi Zingales, 1996. "Financial Dependence and Growth," NBER Working Papers 5758, National Bureau of Economic Research, Inc.
  15. K.H. Midelfart & H.G. Overman & S.J. Redding & A.J. Venables, 2000. "The location of European industry," European Economy - Economic Papers, Directorate General Economic and Monetary Affairs (DG ECFIN), European Commission 142, Directorate General Economic and Monetary Affairs (DG ECFIN), European Commission.
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  18. James Tobin, 1987. "Financial Intermediaries," Cowles Foundation Discussion Papers, Cowles Foundation for Research in Economics, Yale University 817, Cowles Foundation for Research in Economics, Yale University.
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  20. Werner Roeger, 2001. "The contribution of information and communication technologies to growth in Europe and the US: A macroeconomic analysis," European Economy - Economic Papers, Directorate General Economic and Monetary Affairs (DG ECFIN), European Commission 147, Directorate General Economic and Monetary Affairs (DG ECFIN), European Commission.
  21. Sharpe, Steven A, 1990. " Asymmetric Information, Bank Lending, and Implicit Contracts: A Stylized Model of Customer Relationships," Journal of Finance, American Finance Association, American Finance Association, vol. 45(4), pages 1069-87, September.
  22. Paul Schreyer, 2000. "The Contribution of Information and Communication Technology to Output Growth: A Study of the G7 Countries," OECD Science, Technology and Industry Working Papers 2000/2, OECD Publishing.
  23. Michael Leahy & Sebastian Schich & Gert Wehinger & Florian Pelgrin & Thorsteinn Thorgeirsson, 2001. "Contributions of Financial Systems to Growth in OECD Countries," OECD Economics Department Working Papers 280, OECD Publishing.
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  27. repec:fth:eeccco:147 is not listed on IDEAS
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Cited by:
  1. Panayiotis Alexakis & Anna Vasila, 2010. "Equity Interconnections in Major European Markets," European Research Studies Journal, European Research Studies Journal, European Research Studies Journal, vol. 0(3), pages 109-132.
  2. Mariani, Fabio & Padoan, Pierre Carlo, 2003. "The Growth-Finance Nexus and European Integration: A Macroeconomic Perspective," EIFC - Technology and Finance Working Papers, United Nations University, Institute for New Technologies 23, United Nations University, Institute for New Technologies.

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