IDEAS home Printed from https://ideas.repec.org/a/wly/ijfiec/v28y2023i3p2495-2511.html
   My bibliography  Save this article

Sources of economic growth: Bankerteers or marketeers or both? An auto regressive distributed lag (ARDL) evidence from Ghana

Author

Listed:
  • Joy Say
  • Hongjiang Zhao
  • Fang Wang
  • Francisca Sena Agbenyegah

Abstract

The study seeks to find out whether financial structure matters in economic development. Using quarterly data from 1998 to 2018 from Ghana and with auto regressive distributed lag (ARDL)‐bound testing technique in the study found that financial structure is irrelevant for long‐term economic growth in Ghana. The finding of concurs with the complementarity view between the banks and the exchange and rejects that both subsectors are substitutes since financial services indicators were significance in influencing economic growth. In this vein the study concludes on the importance of financial services rather than structure. Based on these observations, the study recommends that policymakers should grow the synergy between the banks and the markets.

Suggested Citation

  • Joy Say & Hongjiang Zhao & Fang Wang & Francisca Sena Agbenyegah, 2023. "Sources of economic growth: Bankerteers or marketeers or both? An auto regressive distributed lag (ARDL) evidence from Ghana," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 28(3), pages 2495-2511, July.
    • Handle: RePEc:wly:ijfiec:v:28:y:2023:i:3:p:2495-2511
    DOI: 10.1002/ijfe.2546
    as

    Download full text from publisher

    File URL: https://doi.org/10.1002/ijfe.2546
    Download Restriction: no
    File URL: https://libkey.io/10.1002/ijfe.2546?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Levine, Ross & Zervos, Sara, 1998. "Stock Markets, Banks, and Economic Growth," American Economic Review, American Economic Association, vol. 88(3), pages 537-558, June.
    2. B Ouattara, 2004. "Modelling the Long Run Determinants of Private Investment in Senegal," Economics Discussion Paper Series 0413, Economics, The University of Manchester.
    3. Asli Demirgüç-Kunt & Erik Feyen & Ross Levine, 2013. "The Evolving Importance of Banks and Securities Markets," The World Bank Economic Review, World Bank, vol. 27(3), pages 476-490.
    4. Rajan, Raghuram G, 1992. "Insiders and Outsiders: The Choice between Informed and Arm's-Length Debt," Journal of Finance, American Finance Association, vol. 47(4), pages 1367-1400, September.
    5. Mariusz Prochniak & Katarzyna Wasiak, 2017. "The impact of the financial system on economic growth in the context of the global crisis: empirical evidence for the EU and OECD countries," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 44(2), pages 295-337, May.
    6. Loayza, Norman V. & Ranciere, Romain, 2006. "Financial Development, Financial Fragility, and Growth," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 38(4), pages 1051-1076, June.
    7. Levine, Ross, 2005. "Finance and Growth: Theory and Evidence," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 12, pages 865-934, Elsevier.
    8. Thorsten Beck, 2003. "Financial Dependence and International Trade," Review of International Economics, Wiley Blackwell, vol. 11(2), pages 296-316, May.
    9. Ross Levine, 1997. "Financial Development and Economic Growth: Views and Agenda," Journal of Economic Literature, American Economic Association, vol. 35(2), pages 688-726, June.
    10. Robert Cull & Asli Demirgüç-Kunt & Justin Yifu Lin, 2013. "Financial Structure and Economic Development: A Reassessment-super-♣," The World Bank Economic Review, World Bank, vol. 27(3), pages 470-475.
    11. Rajan, Raghuram G & Zingales, Luigi, 1998. "Financial Dependence and Growth," American Economic Review, American Economic Association, vol. 88(3), pages 559-586, June.
    12. Bruce D. Smith & John H. Boyd, 1998. "The evolution of debt and equity markets in economic development," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 12(3), pages 519-560.
    13. Beck, Thorsten & Levine, Ross, 2004. "Stock markets, banks, and growth: Panel evidence," Journal of Banking & Finance, Elsevier, vol. 28(3), pages 423-442, March.
    14. Stiglitz, Joseph E, 1985. "Credit Markets and the Control of Capital," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 17(2), pages 133-152, May.
    15. Caselli, Francesco & Esquivel, Gerardo & Lefort, Fernando, 1996. "Reopening the Convergence Debate: A New Look at Cross-Country Growth Empirics," Journal of Economic Growth, Springer, vol. 1(3), pages 363-389, September.
    16. Beck, Thorsten & Levine, Ross & Loayza, Norman, 2000. "Finance and the sources of growth," Journal of Financial Economics, Elsevier, vol. 58(1-2), pages 261-300.
    17. Felix Rioja & Neven Valev, 2004. "Finance and the Sources of Growth at Various Stages of Economic Development," Economic Inquiry, Western Economic Association International, vol. 42(1), pages 127-140, January.
    18. Philip Arestis & Ambika D. Luintel & Kul B. Luintel, 2004. "Does Financial Structure Matter?," Finance 0401006, University Library of Munich, Germany.
    19. Luigi Zingales, 2015. "Does Finance Benefit Society?," NBER Working Papers 20894, National Bureau of Economic Research, Inc.
    20. Demirguc-Kunt, Ash & Maksimovic, Vojislav, 1996. "Stock Market Development and Financing Choices of Firms," The World Bank Economic Review, World Bank, vol. 10(2), pages 341-369, May.
    21. Singh, Ajit & Weisse, Bruce A., 1998. "Emerging stock markets, portfolio capital flows and long-term economie growth: Micro and macroeconomic perspectives," World Development, Elsevier, vol. 26(4), pages 607-622, April.
    22. Pesaran, M. Hashem & Smith, Ron, 1995. "Estimating long-run relationships from dynamic heterogeneous panels," Journal of Econometrics, Elsevier, vol. 68(1), pages 79-113, July.
    23. Atje, Raymond & Jovanovic, Boyan, 1993. "Stock markets and development," European Economic Review, Elsevier, vol. 37(2-3), pages 632-640, April.
    24. Luigi Zingales, 2015. "Presidential Address: Does Finance Benefit Society?," Journal of Finance, American Finance Association, vol. 70(4), pages 1327-1363, August.
    25. Philip Arestis & Ambika Luintel & Kul Luintel, 2010. "Financial structure and economic growth: evidence from time series analyses," Applied Financial Economics, Taylor & Francis Journals, vol. 20(19), pages 1479-1492.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Popov, Alexander, 2017. "Evidence on finance and economic growth," Working Paper Series 2115, European Central Bank.
    2. Thorsten Beck, 2009. "The Econometrics of Finance and Growth," Palgrave Macmillan Books, in: Terence C. Mills & Kerry Patterson (ed.), Palgrave Handbook of Econometrics, chapter 25, pages 1180-1209, Palgrave Macmillan.
    3. Fufa, Tolina & Kim, Jaebeom, 2018. "Stock markets, banks, and economic growth: Evidence from more homogeneous panels," Research in International Business and Finance, Elsevier, vol. 44(C), pages 504-517.
    4. James B. Ang, 2008. "A Survey Of Recent Developments In The Literature Of Finance And Growth," Journal of Economic Surveys, Wiley Blackwell, vol. 22(3), pages 536-576, July.
    5. Joshua Cave & Kausik Chaudhuri & Subal C. Kumbhakar, 2020. "Do banking sector and stock market development matter for economic growth?," Empirical Economics, Springer, vol. 59(4), pages 1513-1535, October.
    6. Seven, Ünal & Yetkiner, Hakan, 2016. "Financial intermediation and economic growth: Does income matter?," Economic Systems, Elsevier, vol. 40(1), pages 39-58.
    7. Sarah Lynne Salvador Daway‐Ducanes & Maria Socorro Gochoco‐Bautista, 2021. "Aspects of financial development and manufacturing and services growth: Which matter?," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 26(2), pages 2560-2580, April.
    8. Marc Steffen Rapp & Iuliia A. Udoieva, 2018. "What matters in the finance–growth nexus of advanced economies? Evidence from OECD countries," Applied Economics, Taylor & Francis Journals, vol. 50(6), pages 676-690, February.
    9. Beck, Thorsten, 2006. "Creating an efficient financial system : challenges in a global economy," Policy Research Working Paper Series 3856, The World Bank.
    10. Philip Arestis & Ambika D. Luintel & Kul B. Luintel, 2004. "Does Financial Structure Matter?," Finance 0401006, University Library of Munich, Germany.
    11. Alessio Ciarlone, 2019. "The relationship between financial development and growth: the case of emerging Europe," Questioni di Economia e Finanza (Occasional Papers) 521, Bank of Italy, Economic Research and International Relations Area.
    12. Ndikumana, Leonce, 2005. "Financial development, financial structure, and domestic investment: International evidence," Journal of International Money and Finance, Elsevier, vol. 24(4), pages 651-673, June.
    13. Samargandi, Nahla & Fidrmuc, Jan & Ghosh, Sugata, 2015. "Is the Relationship Between Financial Development and Economic Growth Monotonic? Evidence from a Sample of Middle-Income Countries," World Development, Elsevier, vol. 68(C), pages 66-81.
    14. repec:rnp:ppaper:mn38 is not listed on IDEAS
    15. Salifou Ouedraogo & Hamidou Sawadogo, 2022. "Financial development, financial structure and economic growth in the Sub‐Saharan African countries," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 27(3), pages 3139-3162, July.
    16. 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.
    17. Seven, Unal & Coskun, Yener, 2016. "Does financial development reduce income inequality and poverty? Evidence from emerging countries," Emerging Markets Review, Elsevier, vol. 26(C), pages 34-63.
    18. Su-Yin Cheng & Han Hou, 2022. "Financial development, life insurance and growth: Evidence from 17 European countries," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 47(4), pages 835-860, October.
    19. Huang, Ho-Chuan (River) & Fang, WenShwo & Miller, Stephen M., 2014. "Does financial development volatility affect industrial growth volatility?," International Review of Economics & Finance, Elsevier, vol. 29(C), pages 307-320.
    20. Joshua Duarte & João Sousa Andrade & Pedro Bação, 2023. "Dynamic effects of financial development on economic activity," Applied Economics, Taylor & Francis Journals, vol. 55(29), pages 3329-3346, June.
    21. Guangdong Xu, 2022. "From financial structure to economic growth: Theory, evidence and challenges," Economic Notes, Banca Monte dei Paschi di Siena SpA, vol. 51(1), February.

    More about this item

    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:wly:ijfiec:v:28:y:2023:i:3:p:2495-2511. 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.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with 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: Wiley Content Delivery (email available below). General contact details of provider: http://www.interscience.wiley.com/jpages/1076-9307/ .

    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.