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Finance and growth: new evidence from meta-analysis

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  • Simplice A. Asongu

Abstract

Purpose - – The purpose of this paper is to bridge the gap between the pros and cons of a questionable finance-growth nexus. Design/methodology/approach - – Over 20 fundamental characteristics that have influenced the debate over the last decades have been examined. The empirical evidence is based on 196 outcomes from 20 studies. The author assesses the degree of heterogeneity and identify causes of the observed differentiation. Findings - – The findings also show evidence of publication bias. Overall, a genuine effect exists between financial development and economic growth. A finance-growth nexus might not be appealing in our era because of: endogeneity-based estimations, publication bias, and effects of financial activity. A historical justification has also been discussed. Practical implications - – Encouraging the publication of results with findings that are not consistent with the mainstream positive finance-growth nexus should provide new scholarly insights into the relationship. Depending on the specific context of sampled countries, the role of policy has also been to encourage financial development through measures that may expose countries to negative external shocks like financial crises. Policy makers that have been viewing the challenges of development exclusively from this point of view for the rewards of growth may not be getting the financial dynamics correctly. Originality/value - – Very few meta-analysis studies have focused on the finance-growth nexus.

Suggested Citation

  • Simplice A. Asongu, 2015. "Finance and growth: new evidence from meta-analysis," Managerial Finance, Emerald Group Publishing, vol. 41(6), pages 615-639, June.
  • Handle: RePEc:eme:mfipps:v:41:y:2015:i:6:p:615-639
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    References listed on IDEAS

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    Cited by:

    1. Simplice Asongu & John C. Anyanwu & Vanessa S. Tchamyou, 2017. "Technology-driven information sharing and conditional financial development in Africa," Working Papers 17/010, African Governance and Development Institute..
    2. Simplice Asongu, 2015. "Determinants of Growth in Fast Developing Countries: Evidence from Bundling and Unbundling Institutions," Working Papers 15/010, African Governance and Development Institute..
    3. Simplice A Asongu & Lieven De Moor, 2017. "Financial Globalisation Dynamic Thresholds for Financial Development: Evidence from Africa," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 29(1), pages 192-212, January.
    4. Simplice A. Asongu & Jacinta C. Nwachukwu, 2017. "At what levels of financial development does information sharing matter?," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 3(1), pages 1-30, December.
    5. Simplice Asongu, 2015. "Drivers of Growth in Fast Emerging Economies: A Dynamic Instrumental Quantile Approach," Working Papers 15/009, African Governance and Development Institute..
    6. Oasis Kodila-Tedika & Simplice Asongu, 2015. "The Effect of Intelligence on Financial Development: A Cross-Country Comparison," Working Papers 15/002, African Governance and Development Institute..
    7. Armando Lenin Támara Ayús & Lina María Eusse Ossa & Andrés Castellón Pérez, 2017. "Efectos del desarrollo financiero sobre el crecimiento económico de Colombia y Chile, 1982-2014," REVISTA FINANZAS Y POLÍTICA ECONÓMICA, UNIVERSIDAD CATOLICA DE COLOMBIA, vol. 9(1), pages 57-67, February.
    8. repec:eee:mulfin:v:40:y:2017:i:c:p:103-114 is not listed on IDEAS
    9. Asongu, Simplice A., 2017. "Assessing marginal, threshold, and net effects of financial globalisation on financial development in Africa," Journal of Multinational Financial Management, Elsevier, vol. 40(C), pages 103-114.
    10. ASONGU, Simplice & ODHIAMBO, Nicholas, 2018. "Drivers Of Growth In Fast Emerging Economies: A Dynamic Instrumental Quantile Approach To Real Output And Its Rates Of Growth In Brics And Mint Countries, 2001-2011," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 18(1), pages 5-22.

    More about this item

    Keywords

    Finance; Economic growth; Meta-analysis; Publication bias;

    JEL classification:

    • C1 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General
    • C4 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics
    • E0 - Macroeconomics and Monetary Economics - - General
    • O0 - Economic Development, Innovation, Technological Change, and Growth - - General

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