Does Financial Development 'Lead' Economic Growth?

Shan, Jordan; Morris, Alan

doi:10.1080/02692170110118885

Cited by 152 publications

(135 citation statements)

References 21 publications

Supporting

Mentioning

111

Contrasting

Unclassified

Order By: Relevance

“…Several studies such as Marin [40] , Pomponio [45] , McCarville and Nnadozie [41] , Darat [9] have used the raditional (F-test) to test for causality. The use of a simple traditional Granger causality has been identified by several studies [14,52] as not sufficient if variables are 1(1) and cointegrated. If time series included in the analysis are 1(1) and cointegrated, the traditional Granger causality test should not be used and proper statistical inference can be obtained by analysing the causality relationship on the basis of the error correction model (ECM).…”

Section: Resultsmentioning

confidence: 99%

“…Shan, Morris and Sun [52] use a Granger causality procedure to investigate the relationship between financial development and economic growth for nine OECD countries and China by estimating a vector autoregression (VAR) model. The results of their study show that five out of ten countries have a bilateral Granger causality; three of them have reverse causality with economic growth leading to financial development while two countries do not have a causal effect at all.…”

Section: Introductionmentioning

confidence: 99%

See 1 more Smart Citation

Causal Relationships between Financial Development, Trade Openness and Economic Growth: The Case of Turkey

Yücel¹

2009

J. of Social Sciences

View full text Add to dashboard Cite

Problem statement:The main objective of this study was to examine the causality relations between financial development, trade openness and economic growth (GDP) for the Turkish economy. Approach: In time series context, recently developed econometric techniques were used: namely the Augmented Dickey-Fuller (ADF) for unit root, Johansen and Juselius (JJ) for cointegration and Granger causality test for causal relationships. Results: The findings of the study showed that while trade openness has a positive effect, financial development has a negative effect on growth. Conclusion: Moreover, the Granger causality test results revealed the presence of bicausal relationship between financial development, trade openness and growth indicating that economic policies aimed at financial development and trade openness have a statistically significant impact on economic growth.

show abstract

Section: Resultsmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Causal Relationships between Financial Development, Trade Openness and Economic Growth: The Case of Turkey

Yücel¹

2009

J. of Social Sciences

View full text Add to dashboard Cite

show abstract

“…King and Levine (1993) concluded that financial development leads economic growth, and Levine and Zervos (1998) found that stockmarket and banking development lead economic growth. In contrast, Arestis and Demetriades (1997), Shan and Morris (2002) and Shan, Sun and Morris (2001) found that the hypothesis was supported in only a few of the countries surveyed and, therefore, that no general conclusions could be drawn.…”

mentioning

confidence: 81%

“…Others, including Sims (1972), Gupta (1984), Jung (1986), Demetriades and Hussein (1996), Demetriades and Luintel (1996), Arestis and Demetriades (1997), Arestis et al (2001) and Shan, Sun and Morris (2001), and Shan and Morris (2002) have used time-series modelling to test the hypothesis. Arestis and Demetriades, in advocating time-series modelling, argued that a cross-sectional approach is based on the implicit assumption that countries have common economic structures and technologies.…”

mentioning

confidence: 99%

Financial opening and economic growth: A quantitative assessment

Shan¹

2012

China: New Engine of World Growth

Self Cite

View full text Add to dashboard Cite

“…This proxy has been used extensively in the literature (Majid, 2008;Odedokun, 1996;Shan & Jianhong, 2006;Wood, 1993). …”

Section: Variable Descriptionmentioning

confidence: 99%

Financial Systems and Economic Growth: Empirical Evidence from Australia

Nyasha¹,

Odhiambo²

2016

View full text Add to dashboard Cite

163This paper examines the dynamic impact of both bank-and market-based financial development on economic growth in Australia during the period from 1980 to 2012. The study uses the autoregressive distributed lag (ARDL) bounds testing approach to examine this linkage. Unlike certain previous studies, this study uses both bank-and market-based financial development indices to measure the level of financial sector development in Australia. These indices were computed using the means-removed average method. The empirical results of this study show that while bankbased financial development has a short-run positive impact on economic growth in Australia, market-based financial development has no significant impact on economic growth, both in the short run and in the long run. These results imply that, in Australia, it is of paramount importance to concentrate on pro-banking sector policies, at least in the short run, to stimulate growth. IntroductionAlthough there is rich literature on the finance-growth nexus, the bulk of such literature is on the relationship between bank-based financial development and economic growth. Only a handful of studies provide coverage on the relationship between market-based financial development and economic growth. However, even in studies that have explored the economic growth impact of market-based financial development, the conclusions are far from conclusive.In the finance-growth literature, there is evidence in support of a positive relationship between financial development and economic growth (Akinlo & Akinlo, 2009;Adu, Marbuah, & Mensah, 2013;Bernard & Austin, 2011;Goldsmith, 1969;Hassan, Sanchez, & Yu, 2011; Kargbo & Adamu, 2009;King & Levine, 1993;Levine & Zervos, 1996;Odedokun, 1996). Despite such overwhelming evidence, some studies conclude that bank-based and market-based financial development have a negative impact on economic growth (Adu et al., 2013;Bernard and Austin, 2011;Buffie, 1984;De Gregorio and Guidotti, 1995;Ujunwa and Salami, 2010;Van Wijnbergen, 1983). In addition to these two contrasting groups of empirical evidence, Australia, bank-based financial development, market-based financial development, economic growth

show abstract

Does Financial Development 'Lead' Economic Growth?

Cited by 152 publications

References 21 publications

Causal Relationships between Financial Development, Trade Openness and Economic Growth: The Case of Turkey

Causal Relationships between Financial Development, Trade Openness and Economic Growth: The Case of Turkey

Financial opening and economic growth: A quantitative assessment

Financial Systems and Economic Growth: Empirical Evidence from Australia

Contact Info

Product

Resources

About