IDEAS home Printed from
MyIDEAS: Log in (now much improved!) to save this paper

Finance and growth: Schumpeter might be wrong in our era. New evidence from Meta-analysis

  • Asongu Simplice



Purpose – In a meta-study on the finance-growth nexus, we have bridged the gap between Schumpeterian authors and sympathizers of a questionable finance-growth nexus. Design/methodology/approach – Over 20 fundamental characteristics that have influenced the debate over the last decades have been examined. The empirical evidence is based on 196 outcomes from 20 studies. We assess the degree of heterogeneity and identify causes of the observed differentiation. Findings – Our findings also show evidence of publication bias. Overall, a genuine effect exists between financial development and economic growth. Schumpeter’s thesis might be wrong in our era because of: endogeneity-based estimations, publication bias and, effects of financial activity. A historical justification has also been discussed. Originality/value – Very few meta-analysis studies have focused on the finance-growth nexus.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL:
File Function: Revised version, 2013
Download Restriction: no

Paper provided by African Governance and Development Institute. in its series Working Papers with number 13/009.

in new window

Length: 26
Date of creation: 14 Jan 2013
Date of revision:
Handle: RePEc:agd:wpaper:13/009
Contact details of provider: Web page:

More information through EDIRC

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as in new window
  1. Ross Levine & Norman Loayza & Thorsten Beck, 2002. "Financial Intermediation and Growth: Causality and Causes," Central Banking, Analysis, and Economic Policies Book Series, in: Leonardo Hernández & Klaus Schmidt-Hebbel & Norman Loayza (Series Editor) & Klaus Schmidt-Hebbel (Se (ed.), Banking, Financial Integration, and International Crises, edition 1, volume 3, chapter 2, pages 031-084 Central Bank of Chile.
  2. Guariglia, Alessandra & Poncet, Sandra, 2008. "Could financial distortions be no impediment to economic growth after all? Evidence from China," Journal of Comparative Economics, Elsevier, vol. 36(4), pages 633-657, December.
  3. Christopoulos, Dimitris K. & Tsionas, Efthymios G., 2004. "Financial development and economic growth: evidence from panel unit root and cointegration tests," Journal of Development Economics, Elsevier, vol. 73(1), pages 55-74, February.
  4. Rati Ram, 1999. "Financial development and economic growth: Additional evidence," Journal of Development Studies, Taylor & Francis Journals, vol. 35(4), pages 164-174.
  5. Norman Loayza & Romain Rancière, 2006. "Financial Development, Financial Fragility, and Growth," Post-Print halshs-00754128, HAL.
  6. Asongu Simplice, 2012. "A Short-run Schumpeterian Trip to Embryonic African Monetary Zones," Working Papers 12/001, African Governance and Development Institute..
  7. Levine, Ross, 1999. "Law, Finance, and Economic Growth," Journal of Financial Intermediation, Elsevier, vol. 8(1-2), pages 8-35, January.
  8. Naceur, Samy Ben & Ghazouani, Samir, 2007. "Stock markets, banks, and economic growth: Empirical evidence from the MENA region," Research in International Business and Finance, Elsevier, vol. 21(2), pages 297-315, June.
  9. Mookerjee, Rajen, 2006. "A meta-analysis of the export growth hypothesis," Economics Letters, Elsevier, vol. 91(3), pages 395-401, June.
  10. Jalil, Abdul & Wahid, Abu N. M. & Shahbaz, Muhammad, 2010. "Financial Development and Growth: A Positive, Monotonic Relationship? Empirical Evidences from South Africa," MPRA Paper 27668, University Library of Munich, Germany.
  11. Hristos Doucouliagos & Janto Haman & T.D. Stanley, 2010. "Pay for Performance and Corporate Governance Reform," Economics Series 2010_04, Deakin University, Faculty of Business and Law, School of Accounting, Economics and Finance.
  12. Chiara M. Travisi & Peter Nijkamp & Raymond J. G. M. Florax, 2004. "A Meta-Analysis of the Willingness to Pay for Reductions in Pesticide Risk Exposure," Working Papers 2004.101, Fondazione Eni Enrico Mattei.
  13. Claessens, Stijn & Laeven, Luc, 2002. "Financial Development, Property Rights and Growth," CEPR Discussion Papers 3295, C.E.P.R. Discussion Papers.
  14. 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.
  15. Giovanni Favara, 2003. "An Empirical Reassessment of the Relationship Between Finance and Growth," IMF Working Papers 03/123, International Monetary Fund.
  16. Huang, Ho-Chuan & Lin, Shu-Chin & Kim, Dong-Hyeon & Yeh, Chih-Chuan, 2010. "Inflation and the finance-growth nexus," Economic Modelling, Elsevier, vol. 27(1), pages 229-236, January.
  17. Asongu Simplice, 2013. "The Knowledge Economy-finance nexus: how do IPRs matter in SSA and MENA countries?," Working Papers 13/023, African Governance and Development Institute..
  18. Asongu, Simplice A, 2013. "How do financial reforms affect inequality through financial sector competition? Evidence from Africa," MPRA Paper 44410, University Library of Munich, Germany.
  19. King, Robert G. & Levine, Ross, 1993. "Finance and growth : Schumpeter might be right," Policy Research Working Paper Series 1083, The World Bank.
  20. Kemal, A.R. & Qayyum, Abdul & Hanif, Muhammad N., 2004. "Financial Development and Economic Growth: Evidence from a Heterogeneous Panel of High Income Countries," MPRA Paper 10198, University Library of Munich, Germany.
  21. Liu, Wan-Chun & Hsu, Chen-Min, 2006. "The role of financial development in economic growth: The experiences of Taiwan, Korea, and Japan," Journal of Asian Economics, Elsevier, vol. 17(4), pages 667-690, October.
  22. Thomas Barnebeck Andersen & Finn Tarp, 2003. "Financial liberalization, financial development and economic growth in LDCs," Journal of International Development, John Wiley & Sons, Ltd., vol. 15(2), pages 189-209.
  23. Chris Doucouliagos, 2005. "Publication Bias in the Economic Freedom and Economic Growth Literature," Journal of Economic Surveys, Wiley Blackwell, vol. 19(3), pages 367-387, 07.
  24. Horváthová, Eva, 2010. "Does environmental performance affect financial performance? A meta-analysis," Ecological Economics, Elsevier, vol. 70(1), pages 52-59, November.
  25. Reinhart, Carmen & Kaminsky, Graciela, 2000. "Las crisis gemelas: las causas de los problemas bancarios y de balanza de pagos
    [The twin crises: Te causes of banking and balance of payments problems]
    ," MPRA Paper 13842, University Library of Munich, Germany.
  26. Iwata, Hiroki & Okada, Keisuke, 2010. "How does environmental performance affect financial performance? Evidence from Japanese manufacturing firms," MPRA Paper 27721, University Library of Munich, Germany.
  27. P. J. Dawson, 2010. "Financial development and economic growth: a panel approach," Applied Economics Letters, Taylor & Francis Journals, vol. 17(8), pages 741-745.
  28. Tomáš Havránek & Zuzana Iršová, 2010. "Meta-Analysis of Intra-Industry FDI Spillovers: Updated Evidence," Czech Journal of Economics and Finance (Finance a uver), Charles University Prague, Faculty of Social Sciences, vol. 60(2), pages 151-174, May.
  29. De Gregorio, Jose & Guidotti, Pablo E., 1995. "Financial development and economic growth," World Development, Elsevier, vol. 23(3), pages 433-448, March.
  30. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
  31. Nuno Carlos LEITÃO, 2010. "Financial Development and Economic Growth: A Panel Data Approach," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania - AGER, vol. 10(10(551)), pages 15-24, October.
  32. Luintel, Kul B. & Khan, Mosahid, 1999. "A quantitative reassessment of the finance-growth nexus: evidence from a multivariate VAR," Journal of Development Economics, Elsevier, vol. 60(2), pages 381-405, December.
  33. Hassan, M. Kabir & Sanchez, Benito & Yu, Jung-Suk, 2011. "Financial development and economic growth: New evidence from panel data," The Quarterly Review of Economics and Finance, Elsevier, vol. 51(1), pages 88-104, February.
  34. T. D. Stanley, 2001. "Wheat from Chaff: Meta-analysis as Quantitative Literature Review," Journal of Economic Perspectives, American Economic Association, vol. 15(3), pages 131-150, Summer.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:agd:wpaper:13/009. 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: (Asongu Simplice)

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 references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link 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 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.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.