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Finance and growth: New evidence from Meta-analysis

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  • Asongu Simplice

    (Yaoundé/Cameroun)

Abstract

Purpose – In a meta-study, we have bridged the gap between the pros and cons 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. A finance-growth nexus might not be appealing in our era because of: endogeneity-based estimations, publication bias and, effects of financial activity. A historical justification has also been discussed. Practical implications – Encouraging the publication of results with findings that are not consistent with the mainstream positive finance-growth nexus should provide new scholarly insights into the relationship. Depending on the specific context of sampled countries, the role of policy has also been to encourage financial development through measures that may expose countries to negative external shocks like financial crises. Policy makers that have been viewing the challenges of development exclusively from this point of view for the rewards of growth may not be getting the financial dynamics correctly. Originality/value – Very few meta-analysis studies have focused on the finance-growth nexus.

Suggested Citation

  • Asongu Simplice, 2013. "Finance and growth: New evidence from Meta-analysis," Working Papers of the African Governance and Development Institute. 13/029, African Governance and Development Institute..
  • Handle: RePEc:agd:wpaper:13/029
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    4. David Adeabah & Charles Andoh & Simplice A. Asongu & Albert Gemegah, 2021. "Reputational risks in banks: A review of research themes, frameworks, methods, and future research directions," Working Papers 21/028, European Xtramile Centre of African Studies (EXCAS).
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    8. Nageri Kamaldeen Ibraheem, 2020. "Ease of Doing Business and Capital Market Development in a Demand Following Hypothesis: Evidence from ECOWAS," Studia Universitatis „Vasile Goldis” Arad – Economics Series, Sciendo, vol. 30(4), pages 24-54, December.
    9. David Adeabah & Charles Andoh & Simplice Asongu & Albert Gemegah, 2023. "Reputational risks in banks: A review of research themes, frameworks, methods, and future research directions," Journal of Economic Surveys, Wiley Blackwell, vol. 37(2), pages 321-350, April.

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    More about this item

    Keywords

    Meta analysis; Finance; Economic growth; Publication bias;
    All these keywords.

    JEL classification:

    • C1 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General
    • C4 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics
    • E0 - Macroeconomics and Monetary Economics - - General
    • O0 - Economic Development, Innovation, Technological Change, and Growth - - General

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