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Does financial intermediation matter for macroeconomic performance?

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Listed author(s):
  • Pierre-Guillaume Méon
  • Laurent Weill

Abstract

This paper investigates whether financial intermediary development influences macroeconomic technical efficiency on a sample of 47 countries, both developed and developing, over 1980-1995. We do so by applying Battese and Coelli (1995)’s method at the aggregate level. It is found that financial intermediary development, except financial depth, is on average associated with more efficiency. However we find strong evidence that this relationship is conditional on the level of economic development. The lower economic development the weaker is the impact of financial development on efficiency. That impact can even become negative in the poorest countries.

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Paper provided by ULB -- Universite Libre de Bruxelles in its series ULB Institutional Repository with number 2013/8404.

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Handle: RePEc:ulb:ulbeco:2013/8404
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Cited by:

  1. repec:dau:papers:123456789/15070 is not listed on IDEAS
  2. L. Chauvet & L. Jacolin, 2016. "Financial Inclusion, Bank Concentration and Firm Performance," Working papers 615, Banque de France.
  3. Gheeraert, Laurent & Weill, Laurent, 2015. "Does Islamic banking development favor macroeconomic efficiency? Evidence on the Islamic finance-growth nexus," Economic Modelling, Elsevier, vol. 47(C), pages 32-39.
  4. Couharde, Cécile & Generoso, Rémi, 2015. "The ambiguous role of remittances in West African countries facing climate variability," Environment and Development Economics, Cambridge University Press, vol. 20(04), pages 493-515, August.
  5. Banyár, József & Regős, Gábor, 2012. "Paradoxical price effects on insurance markets," Economic Modelling, Elsevier, vol. 29(4), pages 1399-1407.

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