Financial Intermediation and Macroeconomic Efficiency
AbstractThis article evaluates whether financial intermediary development explains cross-country differences in macroeconomic efficiency. Stochastic frontier approach is applied at the aggregate level to estimate efficiency on a panel of 41 countries for the period 1991 to 1995. Generalized Method of Moments (GMM) dynamic panel techniques are then adopted to control for potential endogeneity of the regressors. We find evidence of a positive role of financial intermediary development on efficiency, with differences in terms of robustness according to the measure of financial intermediary development.
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Bibliographic InfoPaper provided by Laboratoire de Recherche en Gestion et Economie (LaRGE), Université de Strasbourg in its series Working Papers of LaRGE Research Center with number 2008-03.
Date of creation: 2008
Date of revision:
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Financial development; income; aggregate productivity; efficiency.;
Other versions of this item:
- Yves Kuhry & Laurent Weill, 2010. "Financial intermediation and macroeconomic efficiency," Applied Financial Economics, Taylor & Francis Journals, vol. 20(15), pages 1185-1193.
- C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
- O11 - Economic Development, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
- O16 - Economic Development, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
- O47 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Measurement of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-03-01 (All new papers)
- NEP-EFF-2008-03-01 (Efficiency & Productivity)
- NEP-FDG-2008-03-01 (Financial Development & Growth)
- NEP-MAC-2008-03-01 (Macroeconomics)
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