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Impact of the Stock Market Capitalization and the Banking Spread in Growth and Development in Latin American: A Panel Data Estimation with System GMM

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  • Aali-Bujari, Alí
  • Venegas-Martínez, Francisco
  • Pérez-Lechuga, Gilberto

Abstract

This research is aimed at assessing the impact of the stock market capitalization and the banking spread in per capita economic growth (as a proxy of economic development) in the major Latin American economies during the period 1994-2012. To do this, a panel data model is estimated with both system and difference Generalized Method of Moments. The main empirical findings are that economic growth in the countries under study is positively impacted by the stock market capitalization and negatively by the banking spread. Finally, typical problems of multicollinearity and autocorrelation appearing in panel data analysis are corrected under the proposed methodology.

Suggested Citation

  • Aali-Bujari, Alí & Venegas-Martínez, Francisco & Pérez-Lechuga, Gilberto, 2014. "Impact of the Stock Market Capitalization and the Banking Spread in Growth and Development in Latin American: A Panel Data Estimation with System GMM," MPRA Paper 56588, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:56588
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    References listed on IDEAS

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    Keywords

    Economic growth; economic development; financial sector; panel data;

    JEL classification:

    • O54 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Latin America; Caribbean

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