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Financial Development and Economic Growth - A Comparative Analysis

Author

Listed:
  • Yay, Gülsün

    () (Yildiz Technical University, Faculty of Economics and Administrative Sciences, Department of Economics, Yildiz, 34349, Istanbul, Turkey)

  • Oktayer, Asuman

    () (Yildiz Technical University, Faculty of Economics and Administrative Sciences, Department of Economics,Yildiz, 34349, Istanbul, Turkey)

Abstract

This paper investigates the relationship between financial development and economic growth for developed and developing countries comparatively. The impacts of both stock markets and banks on economic growth are examined by using a panel data set of 21 developing and 16 developed economies for the period 1975-2006. Generalized method of moments technique developed for dynamic panel is applied. While the results of the econometric evidence relevant to developing economies indicate that both stock markets and banks positively influence the economic growth, the results of econometric evidence relevant to developed economies indicate that only stock markets positively influences the economic growth.

Suggested Citation

  • Yay, Gülsün & Oktayer, Asuman, 2009. "Financial Development and Economic Growth - A Comparative Analysis," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 6(3), pages 56-74, September.
  • Handle: RePEc:rjr:romjef:v:6:y:2009:i:3:p:56-74
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    Citations

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    Cited by:

    1. Petra Valickova & Tomas Havranek & Roman Horvath, 2015. "Financial Development And Economic Growth: A Meta-Analysis," Journal of Economic Surveys, Wiley Blackwell, vol. 29(3), pages 506-526, July.
    2. M. Bijlsma & C.J.M. Kool & Marielle Non, 2017. "The effect of financial development on economic growth : a meta-analysis," Working Papers 17-01, Utrecht School of Economics.
    3. repec:cai:refaef:ecofi_127_0037 is not listed on IDEAS
    4. Borlea Sorin Nicolae & Puscas Adriana & Mare Codruta & Achim Monica Violeta, 2016. "Direction of Causality Between Financial Development and Economic Growth. Evidence for Developing Countries," Studia Universitatis „Vasile Goldis” Arad – Economics Series, De Gruyter Open, vol. 26(2), pages 1-22, June.

    More about this item

    Keywords

    economic growth; stock markets; banks; financial markets; dynamic panel;

    JEL classification:

    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance

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