IDEAS home Printed from https://ideas.repec.org/a/wsi/rpbfmp/v20y2017i03ns0219091517500163.html
   My bibliography  Save this article

Financial Deepening and Economic Growth in Transition Economies of Southeast Asia: A Geweke Causality Analysis

Author

Listed:
  • Khee Giap Tan

    (National University of Singapore, Singapore)

  • Sasidaran Gopalan

    () (National University of Singapore, Singapore)

  • Phuong Anh Nguyen Le

    () (National University of Singapore, Singapore)

Abstract

Cambodia, Laos and Vietnam (CLV) have come to be recognized as the new growth frontiers in the Association of Southeast Asian Nations (ASEAN) bloc, especially since the 2000s. Though all the CLV countries were hit by the global financial crisis (GFC), there has been a sharp recovery in all the economies from around 2010 or so, partly aided by the rapid development of their financial sector. While this has formed the basis for optimism about the growth potential of these countries, there have also been concerns that these countries have been experiencing a period of excessive credit growth – an offshoot of rapid financial deepening – which in turn is hampering growth and aggravating financial instability. In light of this discussion, this paper examines the nexus between financial deepening and economic growth employing a Geweke causality framework with quarterly data for CLV countries from 1996 to 2010.

Suggested Citation

  • Khee Giap Tan & Sasidaran Gopalan & Phuong Anh Nguyen Le, 2017. "Financial Deepening and Economic Growth in Transition Economies of Southeast Asia: A Geweke Causality Analysis," Review of Pacific Basin Financial Markets and Policies (RPBFMP), World Scientific Publishing Co. Pte. Ltd., vol. 20(03), pages 1-25, September.
  • Handle: RePEc:wsi:rpbfmp:v:20:y:2017:i:03:n:s0219091517500163
    DOI: 10.1142/S0219091517500163
    as

    Download full text from publisher

    File URL: http://www.worldscientific.com/doi/abs/10.1142/S0219091517500163
    Download Restriction: Access to full text is restricted to subscribers.

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Chinn, Menzie D. & Ito, Hiro, 2006. "What matters for financial development? Capital controls, institutions, and interactions," Journal of Development Economics, Elsevier, vol. 81(1), pages 163-192, October.
    2. repec:bla:devpol:v:36:y:2018:i:s2:p:o954-o983 is not listed on IDEAS
    3. Rungrudee Suetorsak, 2006. "Banking crisis in east asia: A micro/macro perspective," Review of Quantitative Finance and Accounting, Springer, vol. 26(3), pages 219-248, May.
    4. Beck, Thorsten & Levine, Ross, 2004. "Stock markets, banks, and growth: Panel evidence," Journal of Banking & Finance, Elsevier, vol. 28(3), pages 423-442, March.
    5. Boris Pleskovic & Joseph E. Stiglitz, 2000. "Annual World Bank Conference on Development Economics 1999," World Bank Publications, The World Bank, number 13839.
    6. Robert G. King & Ross Levine, 1993. "Finance and Growth: Schumpeter Might Be Right," The Quarterly Journal of Economics, Oxford University Press, vol. 108(3), pages 717-737.
    7. Levine, Ross & Zervos, Sara, 1998. "Stock Markets, Banks, and Economic Growth," American Economic Review, American Economic Association, vol. 88(3), pages 537-558, June.
    8. Sasidaran Gopalan, 2015. "Does Foreign Bank Entry Contribute to Financial Depth?: Examining The Role of Income Thresholds," HKUST IEMS Working Paper Series 2015-05, HKUST Institute for Emerging Market Studies, revised Feb 2015.
    9. Calderon, Cesar & Liu, Lin, 2003. "The direction of causality between financial development and economic growth," Journal of Development Economics, Elsevier, vol. 72(1), pages 321-334, October.
    10. Ayhan Kose, M. & Prasad, Eswar S. & Taylor, Ashley D., 2011. "Thresholds in the process of international financial integration," Journal of International Money and Finance, Elsevier, vol. 30(1), pages 147-179, February.
    11. 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.
    12. Baltagi, Badi H. & Demetriades, Panicos O. & Law, Siong Hook, 2009. "Financial development and openness: Evidence from panel data," Journal of Development Economics, Elsevier, vol. 89(2), pages 285-296, July.
    13. Rajan, Raghuram G. & Zingales, Luigi, 2003. "The great reversals: the politics of financial development in the twentieth century," Journal of Financial Economics, Elsevier, vol. 69(1), pages 5-50, July.
    14. De Gregorio, Jose & Guidotti, Pablo E., 1995. "Financial development and economic growth," World Development, Elsevier, vol. 23(3), pages 433-448, March.
    15. Granger, C W J, 1969. "Investigating Causal Relations by Econometric Models and Cross-Spectral Methods," Econometrica, Econometric Society, vol. 37(3), pages 424-438, July.
    16. Calderon, Cesar & Kubota, Megumi, 2009. "Does financial openness lead to deeper domestic financial markets ?," Policy Research Working Paper Series 4973, The World Bank.
    17. Nili, Masoud & Rastad, Mahdi, 2007. "Addressing the growth failure of the oil economies: The role of financial development," The Quarterly Review of Economics and Finance, Elsevier, vol. 46(5), pages 726-740, February.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. repec:asi:aeafrj:2018:p:1086-1101 is not listed on IDEAS

    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:wsi:rpbfmp:v:20:y:2017:i:03:n:s0219091517500163. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Tai Tone Lim). General contact details of provider: http://www.worldscinet.com/rpbfmp/rpbfmp.shtml .

    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 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.