IDEAS home Printed from https://ideas.repec.org/a/pcp/pucrev/y2020i85p47-64.html
   My bibliography  Save this article

Financial Development and Economic Growth: New Evidence

Author

Listed:
  • Jennifer De la Cruz

    (Bachelor of Economics, Pontificia Universidad Católica del Perú)

Abstract

Financial systems around the world have undergone considerable development. This paper analyzes the effect of financial development on economic growth. It replicates the estimation of Becket al. (2000), one of the pioneering research papers in this field. Then, it tests the sensibility of the results by expanding the sample of countries (99) and the period (1961–2010). This study con-tributes to the literature by analyzing differentiated effects when a country’s economic conditions are incorporated. The results show that the positive impact of financial development on economic growth found by Beck et al. (2000) becomes non-significant if financial crises and macroeconomic instability periods are taken into account. However, if income per capita level is considered, the impact becomes positive and significant in high-income countries and decreases in low-income per capita countries. This impact is influenced by each country’s level of education, level of financial deepening, and average inflation rate over the last ten years.

Suggested Citation

  • Jennifer De la Cruz, 2020. "Financial Development and Economic Growth: New Evidence," Revista Economía, Fondo Editorial - Pontificia Universidad Católica del Perú, vol. 43(85), pages 47-64.
    • Handle: RePEc:pcp:pucrev:y:2020:i:85:p:47-64
    as

    Download full text from publisher

    File URL: https://revistas.pucp.edu.pe/index.php/economia/article/view/21976/21382
    Download Restriction: no
    ---><---

    More about this item

    Keywords

    Financial development; Economic growth; Dynamic panel analysis;
    All these keywords.

    JEL classification:

    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pcp:pucrev:y:2020:i:85:p:47-64. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/depucpe.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.