Financial intermediation and growth - Chinese style
The author analyzes the relationship between growth and financial intermediation at the sub-national level within China. Does the quality of the banking sector in a province affect its rate of growth? Do state and non-state banking sectors perform differently? Does the structure of the local banking sector affect the rate of provincial economic growth? To answer these questions, the author first uses evidence on the fragmentation of regional capital markets to justify the existence of local credit channels. Second, using a dataset of 26 provinces between 1990 and 1999, she defines and introduces indicators of local banking development into the traditional growth regression framework using the GMM-system estimator. The results suggest that credit extended by the banking sector at the state level has a negative impact on provincial economic growth. This negative effect appears to be attributable to the burden of supporting the state-owned corporate sector rather than to the poor performance of state-owned banks. Moreover, provinces with more diversified banking sectors appear to grow faster.
|Date of creation:||30 Apr 2003|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: (202) 477-1234
Web page: http://www.worldbank.org/
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.:
- Richard Blundell & Steve Bond, 1995.
"Initial conditions and moment restrictions in dynamic panel data models,"
IFS Working Papers
W95/17, Institute for Fiscal Studies.
- Blundell, Richard & Bond, Stephen, 1998. "Initial conditions and moment restrictions in dynamic panel data models," Journal of Econometrics, Elsevier, vol. 87(1), pages 115-143, August.
- Blundell, R. & Bond, S., 1995. "Initial Conditions and Moment Restrictions in Dynamic Panel Data Models," Economics Papers 104, Economics Group, Nuffield College, University of Oxford.
- R Blundell & Steven Bond, . "Initial conditions and moment restrictions in dynamic panel data model," Economics Papers W14&104., Economics Group, Nuffield College, University of Oxford.
- Thorsten Beck & Asli Demirgüç-Kunt & Ross Levine, 2000. "A New Database on the Structure and Development of the Financial Sector," World Bank Economic Review, World Bank Group, vol. 14(3), pages 597-605, September.
- Bond, Stephen Roy & Hoeffler, Anke & Temple, Jonathan, 2001.
"GMM Estimation of Empirical Growth Models,"
CEPR Discussion Papers
3048, C.E.P.R. Discussion Papers.
- Jian, Tianlun & Sachs, Jeffrey D. & Warner, Andrew M., 1996.
"Trends in regional inequality in China,"
China Economic Review,
Elsevier, vol. 7(1), pages 1-21.
- Tianlun Jian & Jeffrey D. Sachs & Andrew M. Warner, 1996. "Trends in Regional Inequality in China," NBER Working Papers 5412, National Bureau of Economic Research, Inc.
- Jian, T & Sachs, J-D & Warner, A-M, 1995. "Trends in Regional Inequality in China," Papers 518, Harvard - Institute for International Development.
- Sinn, Stefan, 1992. "Saving-Investment Correlations and Capital Mobility: On the Evidence from Annual Data," Economic Journal, Royal Economic Society, vol. 102(414), pages 1162-70, September.
- Sandra PONCET, 2002. "Is China Disintegrating? The Magnitude of Chinese Provinces' Domestic and International Integration," Working Papers 200205, CERDI.
- Levine, Ross, 1996.
"Financial development and economic growth : views and agenda,"
Policy Research Working Paper Series
1678, The World Bank.
- Ross Levine, 1997. "Financial Development and Economic Growth: Views and Agenda," Journal of Economic Literature, American Economic Association, vol. 35(2), pages 688-726, June.
- Iwamoto, Yasushi & van Wincoop, Eric, 2000. "Do Borders Matter? Evidence from Japanese Regional Net Capital Flows," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 41(1), pages 241-69, February.
- Pasaran, M.H. & Im, K.S. & Shin, Y., 1995.
"Testing for Unit Roots in Heterogeneous Panels,"
Cambridge Working Papers in Economics
9526, Faculty of Economics, University of Cambridge.
- Nicola Cetorelli, 2001.
"Banking Market Structure, Financial Dependence and Growth: International Evidence from Industry Data,"
Journal of Finance,
American Finance Association, vol. 56(2), pages 617-648, 04.
- Nicola Cetorelli & Michele Gambera, 1999. "Banking Market Structure, Financial Dependence and Growth: International Evidence from Industry Data," Center for Financial Institutions Working Papers 00-19, Wharton School Center for Financial Institutions, University of Pennsylvania.
- Nicola Cetorelli & Michele Gambera, 1999. "Banking market structure, financial dependence and growth: international evidence from industry data," Working Paper Series WP-99-8, Federal Reserve Bank of Chicago.
- Sylvie Démurger & Jeffrey D. Sachs & Wing Thye Woo & Shuming Bao & Gene Chang & Andrew Mellinger, 2002.
"Geography, Economic Policy, and Regional Development in China,"
Asian Economic Papers,
MIT Press, vol. 1(1), pages 146-197.
- Sylvie DEMURGER & SACHS & Wing Thye WOO & BAO & CHANG & MELLINGER, 2001. "Geography, Economic Policy and Regional Development in China," Working Papers 200109, CERDI.
- Sylvie Demurger & Jeffrey D. Sachs & Wing Thye Woo & Shuming Bao, Gene Chang & Andrew Mellinger, 2002. "Geography, Economic Policy, and Regional Development in China," NBER Working Papers 8897, National Bureau of Economic Research, Inc.
- Sylvie Demurger & Jeffrey D. Sachs & Wing Thye Woo & Shuming Bao & Gene Chang & Andrew Mellinger, 2002. "Geography, Economic Policy and Regional Development in China," Harvard Institute of Economic Research Working Papers 1950, Harvard - Institute of Economic Research.
- Bayoumi, Tamim A. & Rose, Andrew K., 1993. "Domestic savings and intra-national capital flows," European Economic Review, Elsevier, vol. 37(6), pages 1197-1202, August.
- Martin Raiser, 1998. "Subsidising inequality: Economic reforms, fiscal transfers and convergence across Chinese provinces," Journal of Development Studies, Taylor & Francis Journals, vol. 34(3), pages 1-26.
- Mody, Ashoka & Wang, Fang-Yi, 1997. "Explaining Industrial Growth in Coastal China: Economic Reforms . . . and What Else?," World Bank Economic Review, World Bank Group, vol. 11(2), pages 293-325, May.
- Alun H. Thomas, 1993. "Saving, Investment, and the Regional Current Account; An Analysis of Canadian, British, and German Regions," IMF Working Papers 93/62, International Monetary Fund.
- Feldstein, Martin & Horioka, Charles, 1980.
"Domestic Saving and International Capital Flows,"
Royal Economic Society, vol. 90(358), pages 314-29, June.
- Albert Park and Kaja Sehrt & Albert Park and Kaja Sehrt, 1999.
"Tests of Financial Intermediation and Banking Reform in China,"
William Davidson Institute Working Papers Series
270, William Davidson Institute at the University of Michigan.
- Park, Albert & Sehrt, Kaja, 2001. "Tests of Financial Intermediation and Banking Reform in China," Journal of Comparative Economics, Elsevier, vol. 29(4), pages 608-644, December.
- Demurger, Sylvie, 2001. "Infrastructure Development and Economic Growth: An Explanation for Regional Disparities in China?," Journal of Comparative Economics, Elsevier, vol. 29(1), pages 95-117, March.
- A. W. Wood, 1957. "Discussion," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 5(2), pages 62-64, 07.
- Chen, Baizhu & Feng, Yi, 2000. "Determinants of economic growth in China: Private enterprise, education, and openness," China Economic Review, Elsevier, vol. 11(1), pages 1-15.
- Michelle Clark Neely & David C. Wheelock, 1997. "Why does bank performance vary across states?," Review, Federal Reserve Bank of St. Louis, issue Mar, pages 27-40.
- Chen, Jian & Fleisher, Belton M., 1996. "Regional Income Inequality and Economic Growth in China," Journal of Comparative Economics, Elsevier, vol. 22(2), pages 141-164, April.
When requesting a correction, please mention this item's handle: RePEc:wbk:wbrwps:3027. 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: (Roula I. Yazigi)
If references are entirely missing, you can add them using this form.