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Technical Efficiency and Financial Deepening in the non-OECD Economies

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  • Philip Arestis
  • Georgios Chortareas
  • Evangelia Desli

Abstract

This contribution investigates the channels through which the relationship between financial deepening and growth materializes. While this relationship has been extensively explored over the recent past, less attention has been paid to the channels through which the relationship comes about. In continuing our exploration of this relationship, instead of using a total factor productivity measure, as the existing literature does, we model productive efficiency in a more explicit and comprehensive way using non-parametric methodologies to construct efficiency frontiers. We consider the link between financial deepening and productive efficiency in a number of non-OECD countries, using the data available from the Penn World Tables. Our results show that financial development has in general a positive effect on productive efficiency.

Suggested Citation

  • Philip Arestis & Georgios Chortareas & Evangelia Desli, 2006. "Technical Efficiency and Financial Deepening in the non-OECD Economies," International Review of Applied Economics, Taylor & Francis Journals, vol. 20(3), pages 353-373.
    • Handle: RePEc:taf:irapec:v:20:y:2006:i:3:p:353-373
    DOI: 10.1080/02692170600736151
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    References listed on IDEAS

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    Cited by:

    1. Concetta Castiglione, 2012. "Technical efficiency and ICT investment in Italian manufacturing firms," Applied Economics, Taylor & Francis Journals, vol. 44(14), pages 1749-1763, May.
    2. Eskander Alvi & Aberra Senbeta, 2012. "Foreign Aid: Good for Investment, Bad for Productivity," Oxford Development Studies, Taylor & Francis Journals, vol. 40(2), pages 139-161, June.
    3. Aysan, Ahmet Faruk & Ertek, Gurdal & Ozturk, Secil, 2009. "Assessing the adverse effects of interbank funds on bank efficiency through using semiparametric and nonparametric methods," MPRA Paper 38113, University Library of Munich, Germany.
    4. Philip Arestis & Georgios Chortareas & Evangelia Desli, 2006. "Financial Development And Productive Efficiency In Oecd Countries: An Exploratory Analysis," Manchester School, University of Manchester, vol. 74(4), pages 417-440, July.

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