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Finance and growth in a small open emerging market

Author

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  • Law, Siong Hook
  • Azman-Saini, W.N.W.
  • Smith, Peter

Abstract

This study contributes to the debate on financial development and economic growth in Malaysia using quarterly observations for a sample period from 1980 to 2002. It utilises a battery of financial indicators. Based on multivariate framework which takes real interest rate and capital stock into account, the findings are suggestive that finance does play a crucial role in promoting economic growth. Policymakers should, therefore, focus their attention on the creation and promotion of modern financial institutions including banks, non-banks, and stock markets in delivering both short- and long-run economic benefits.

Suggested Citation

  • Law, Siong Hook & Azman-Saini, W.N.W. & Smith, Peter, 2006. "Finance and growth in a small open emerging market," MPRA Paper 715, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:715
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    References listed on IDEAS

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    Keywords

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    JEL classification:

    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)

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