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Financial development, institutional investors, and economic growth

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  • Ruiz, Jose L.

Abstract

This study analyzes the nonlinear relationship between financial development under the presence of institutional investors (assets in insurance companies, mutual funds, and pension funds, as a percentage of GDP) and economic growth. The analysis considers data on 116 economies obtained from the World Bank for the period 1991–2014. We examine both industrialized and developing economies using a dynamic panel threshold technique. We find that countries below the finance threshold grow less and those above the threshold grow faster. In addition, in the industrialized economies, institutional investors have a positive effect on the growth of GDP per capita.

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  • Ruiz, Jose L., 2018. "Financial development, institutional investors, and economic growth," International Review of Economics & Finance, Elsevier, vol. 54(C), pages 218-224.
    • Handle: RePEc:eee:reveco:v:54:y:2018:i:c:p:218-224
    DOI: 10.1016/j.iref.2017.08.009
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    More about this item

    Keywords

    Economic growth; Financial development; Institutional investors;
    All these keywords.

    JEL classification:

    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • I25 - Health, Education, and Welfare - - Education - - - Education and Economic Development
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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