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Does structural matching between finance and the real economy promote economic growth?

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  • Ye, Dezhu
  • Huang, Yunjue
  • Zeng, Fanqing

Abstract

Recent analysis of how finance serves the real economy have mainly focused on the quantity. We discuss this issue from the perspective of structural matching between finance and the real economy. We first use assortative matching model to analyze the relationship between financial structure and technological structure, then construct the structural matching indicator, finally empirical test the impact of structural matching on economic growth. The empirical results show that the matching indicator between financial structure and technological structure has a significantly positive effect on economic growth, and this impact is more significantly in developed countries. The channels through which structural matching exerts its influence on economic growth include capital accumulation and productivity growth. Our empirical findings withstand a series of robustness tests.

Suggested Citation

  • Ye, Dezhu & Huang, Yunjue & Zeng, Fanqing, 2021. "Does structural matching between finance and the real economy promote economic growth?," International Review of Economics & Finance, Elsevier, vol. 73(C), pages 11-29.
    • Handle: RePEc:eee:reveco:v:73:y:2021:i:c:p:11-29
    DOI: 10.1016/j.iref.2020.12.037
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    Cited by:

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    2. Xiaoye Liu & Kedong Yin & Yun Cao, 2021. "Contribution of the Optimization of Financial Structure to the Real Economy: Evidence from China’s Financial System Using TVP-VAR Model," Mathematics, MDPI, vol. 9(18), pages 1-21, September.
    3. Dezhu Ye & Yunjue Huang & Xian Ye, 2023. "Financial Structure, Technology, and Economic Growth: A Structural Matching Perspective," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 31(1), pages 119-148, January.

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    More about this item

    Keywords

    Optimal financial structure; Finance serving the real economy; Structural matching; Economic growth;
    All these keywords.

    JEL classification:

    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • G00 - Financial Economics - - General - - - General
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance

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