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Contributions of Financial Systems to Growth in OECD Countries

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Author Info
Michael Leahy
Sebastian Schich
Gert Wehinger
Florian Pelgrin
Thorsteinn Thorgeirsson
Abstract

The recent period of sustained high growth in the United States has drawn attention to its financial system and the efficiency with which it seems to be able to channel funds to new productive investment projects, particularly in hi-tech industries. This study examines the role played by the financial systems in OECD countries and how they affect resource allocation and growth. It provides evidence suggesting that legal and regulatory framework conditions for financial systems, and particularly their enforcement and transparency, support innovation and investment in new enterprises. In addition, using dynamic panel regression techniques, the study finds significant relationships between investment and financial development, as measured by indicators of the scale of financial activity. Evidence is also found of significant relationships between financial development and growth — over and above the links via investment — indicating impacts via overall economic efficiency ...


La forte croissance soutenue aux États-Unis pendant la période récente a attiré l’attention sur son système financier et l’efficacité avec laquelle il semble être capable de financer des nouveaux projets d’investissement productif, en particulier dans les industries de haute technologie. Cette étude examine le rôle joué par les systèmes financiers dans les pays de l’OCDE et comment ils influent sur l’allocation des ressources et la croissance. Elle prouve à l’évidence que les systèmes financiers réunissant les conditions d’un cadre institutionnel et réglementaire, en particulier dans l’exécution et la transparence, contribuent à l’innovation et l’investissement dans de nouvelles entreprises. De plus, en utilisant des techniques de régression dynamique en panel, l’étude constate des relations significatives entre l’investissement et le développement financier, qui servent d’indicateurs de l’échelle de l’activité financière. Il parait tout aussi évident qu’il y a une relation entre ...

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File URL: http://dx.doi.org/10.1787/888167575648
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Paper provided by OECD, Economics Department in its series OECD Economics Department Working Papers with number 280.

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Date of creation: 21 Mar 2001
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Handle: RePEc:oec:ecoaaa:280-en

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Keywords: creditors; development; enforcement; financial systems; growth; innovation; investment; panel analysis; shareholders; transparency; actionnaires; analyse par panel; créanciers; croissance; développement; innovation; investissement; recouvrement; système financier; transparence;

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Find related papers by JEL classification:
C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data
E22 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - Capital; Investment; Capacity
G20 - Financial Economics - - Financial Institutions and Services - - - General
G30 - Financial Economics - - Corporate Finance and Governance - - - General
O40 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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