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Access to Finance Thresholds and the Finance-Growth Nexus

Author

Listed:
  • Riadh Ben Jelili

    (DHAMAN - The Arab Investment and Export Credit Guarantee Corporation)

  • Walid Abdmoulah

    (Arab Planning Institute)

Abstract

Based on Aghion et al. (2005), this article provides new insights regarding whether financial development can affect economic growth non-linearly by adopting the concept of threshold effects. The empirical approach adopted in this article allows for the finance-growth relationship to be piecewise linear with a set of indicators including access to finance acting as a regime-switching trigger. Using crosscountry observations from 144 countries stretching from 1985 to 2009, strong evidence of threshold effects in finance-growth link is found. It is suggested that financial development in general, and access to finance in particular, is among the important forces contributing to crosscountry (non)-convergences in growth rates.

Suggested Citation

  • Riadh Ben Jelili & Walid Abdmoulah, 2013. "Access to Finance Thresholds and the Finance-Growth Nexus," Post-Print hal-03840532, HAL.
    • Handle: RePEc:hal:journl:hal-03840532
    DOI: 10.1111/1759-3441.12059
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    Cited by:

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    2. Chauvet, Lisa & Jacolin, Luc, 2017. "Financial Inclusion, Bank Concentration, and Firm Performance," World Development, Elsevier, vol. 97(C), pages 1-13.
    3. Emara, Noha & El Said, Ayah, 2021. "Financial inclusion and economic growth: The role of governance in selected MENA countries," International Review of Economics & Finance, Elsevier, vol. 75(C), pages 34-54.
    4. Lisa Chauvet & Luc Jacolin, 2015. "Financial Inclusion and Firms performance," Post-Print hal-01516871, HAL.
    5. Asit Bhattacharyya & Sue Wright & Md Lutfur Rahman, 2021. "Is better banking performance associated with financial inclusion and mandated CSR expenditure in a developing country?," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 61(1), pages 125-161, March.
    6. IWASAKI, Ichiro & ONO, Shigeki, 2023. "Economic Development and the Finance-Growth Nexus : A Meta-Analytic Approach," CEI Working Paper Series 2023-06, Center for Economic Institutions, Institute of Economic Research, Hitotsubashi University.
    7. Maty Konte & Godsway Korku Tetteh, 2023. "Mobile money, traditional financial services and firm productivity in Africa," Small Business Economics, Springer, vol. 60(2), pages 745-769, February.
    8. Hazwan Haini & Lutfi Abdul Razak & Pang Wei Loon & Sufrizul Husseini, 2023. "Re-examining the finance–institutions–growth nexus: does financial integration matter?," Economic Change and Restructuring, Springer, vol. 56(3), pages 1895-1924, June.
    9. Mansor Ibrahim, 2018. "Finance And Inequality In Eight Asian Countries: Does Size Matter," Bulletin of Monetary Economics and Banking, Bank Indonesia, vol. 21(1), pages 1-24, July.

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    More about this item

    Keywords

    Financial development; Access to finance; Economic growth; Threshold regression;
    All these keywords.

    JEL classification:

    • C54 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Quantitative Policy Modeling
    • E20 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - General (includes Measurement and Data)

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