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Financial Development and Economic Growth: Role of Institutional Quality

  • Abdelkarim Yahyaoui

    ()

    (Faculté des Sciences Economiques et de Gestion de Sfax, Université de Sfax-Tunisie, Unité de Recherche en Economie de Développement (URED))

  • Atef Rahmani

    ()

    (Faculté des Sciences Economiques et de Gestion de Sfax (Tunisie), Unité de Recherche en Economie de Développement (URED) et Centre d’Etudes en Macroéconomie et Finance Internationale (CEMAFI / Université de Nice Sophia-Antipolis))

The objective of our work is to show the importance of a healthy institutional framework in the finance-growth relation. In this context, we start by presenting, a theoretical lighting on this subject while trying to define the concept of the governorship and to determine its various measurements. Then, we empirically test a model of growth of Solow increased by the human capital, treating relation between financial development, institutions and economic growth. The various estimates were made by Panel data Methods over the period of 1990 to 2006 for 22 developing countries. Following these estimates, it seems that the quality of the institutions is regarded as an important factor which must not be neglected in the study of the relation between the financial sphere and the real sphere.

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Article provided by Savez ekonomista Vojvodine, Novi Sad, Serbia in its journal Panoeconomicus.

Volume (Year): 56 (2009)
Issue (Month): 3 (September)
Pages: 327-357

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Handle: RePEc:voj:journl:v:56:y:2009:i:3:p:327-357
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