Does financial development matter for economic growth in the emerging markets?

Nguyen, Ha Minh; Le, Quan Thai-Thuong; Hồ, Chí Minh; Nguyen, Thang Cong; Vo, Duc Hong

doi:10.1016/j.bir.2021.10.004

Cited by 75 publications

(66 citation statements)

References 39 publications

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“…The focal point of this paper is identifying and analyzing the existence of causality using G-causality and Schreiber transfer entropy within the KLFIN’s 28 constituents. This study differs from other studies [ 70 , 89 , 96 , 97 ] where the cited works performed G-causality on the indexes itself and not the individual constituents. This was demonstrated during pre- and post-COVID-19, which can be considered as one of the most uncertain times in the modern world.…”

Section: Discussioncontrasting

confidence: 78%

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The Causality and Uncertainty of the COVID-19 Pandemic to Bursa Malaysia Financial Services Index’s Constituents

Zuhud

Musa

Ismail

et al. 2022

Entropy

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Valued in hundreds of billions of Malaysian ringgit, the Bursa Malaysia Financial Services Index’s constituents comprise several of the strongest performing financial constituents in Bursa Malaysia’s Main Market. Although these constituents persistently reside mostly within the large market capitalization (cap), the existence of the individual constituent’s causal influence or intensity relative to each other’s performance during uncertain or even certain times is unknown. Thus, the key purpose of this paper is to identify and analyze the individual constituent’s causal intensity, from early 2018 (pre-COVID-19) to the end of the year 2021 (post-COVID-19) using Granger causality and Schreiber transfer entropy. Furthermore, network science is used to measure and visualize the fluctuating causal degree of the source and the effected constituents. The results show that both the Granger causality and Schreiber transfer entropy networks detected patterns of increasing causality from pre- to post-COVID-19 but with differing causal intensities. Unexpectedly, both networks showed that the small- and mid-caps had high causal intensity during and after COVID-19. Using Bursa Malaysia’s sub-sector for further analysis, the Insurance sub-sector rapidly increased in causality as the year progressed, making it one of the index’s largest sources of causality. Even after removing large amounts of weak causal intensities, Schreiber transfer entropy was still able to detect higher amounts of causal sources from the Insurance sub-sector, whilst Granger causal sources declined rapidly post-COVID-19. The method of using directed temporal networks for the visualization of temporal causal sources is demonstrated to be a powerful approach that can aid in investment decision making.

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Section: Discussioncontrasting

confidence: 78%

“…Once the optimal lag-time is calculated and retrieved, the pairwise causality is computed. Some similar pairwise analyses were conducted on [ 70 , 89 , 96 , 97 ]. However, the cited works performed G-causality on the indexes itself and not the individual constituents.…”

Section: Methodsmentioning

confidence: 99%

The Causality and Uncertainty of the COVID-19 Pandemic to Bursa Malaysia Financial Services Index’s Constituents

Zuhud

Musa

Ismail

et al. 2022

Entropy

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“…Regarding the influencing factors of China's regional economic growth, the previous literature has analyzed many different aspects, such as the construction of infrastructure [13,14], domestic financial development [15,16], foreign direct investment [17,18], trade openness [19,20], political and administrative institution [21], and the government's fiscal and monetary policies [22,23]. Among the different places in China, resource-based cities should be specially studied because their resource-dependent economic system is not sustainable in the long run, and many of them faced severe development problems as described by previous studies on the "Dutch disease" [5][6][7]11,12] and "resource curse" [9,[24][25][26].…”

Section: Literature Reviewmentioning

confidence: 99%

Did China’s “National Sustainable Development Plan of Resource-Based Cities” Promote Economic Growth?

Wang

2022

Sustainability

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This study utilizes a difference-in-difference (DID) regression model to evaluate the impact of China’s “National Sustainable Development Plan of Resource-Based Cities (2013–2020)” on economic growth in resource-based cities. The analysis is based on the data covering 329 Chinese cities during 2006–2019. Economic growth is measured by the annual growth rate of gross domestic product (GDP). It was found that the policy had a significantly negative impact on economic growth. Further analysis suggests that the policy depressed innovation in resource-based cities, and these cities did not expand their labor and capital inputs. These two phenomena can help explain why the policy’s effect on economic growth was negative, rather than positive. Moreover, our study reports that the effect of the policy was heterogeneous across different cities, depending on their development stages and spatial locations. Overall, our study detects an undesirable effect of the policy. The research findings call for more actions to promote macroeconomic growth during the process of economic transformation in China’s resource-based cities.

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“…For example, financial development is seen not only as stimulating economic growth in emerging economies (i.e. Boikos et al, 2022;Nguyen, 2021) but also as a convergence factor; it positively affects the speed of convergence (Ranjibar and Rasseekh, 2017). The process of globalization has beneficial effects on economic growth in developing countries (i.e.…”

Section: Introductionmentioning

confidence: 99%

Does Financial Development, Globalisation and Institutional Quality Drive the Income Convergence in the Central and Eastern European Union Countries?

PORUMBACEAN

Anghelina

2023

Studia Universitatis „Vasile Goldis” Arad – Economics Series

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Central and Eastern European (CEE) countries are struggling with internal and external macroeconomic and social factors in their catching-up strategies to be closer, as economic wealth, to the Western developed European countries. In these ex-communist countries, institutional factors could be seen as critical for success in narrowing the income gap. The paper proposes an analysis of the impact of economic and financial development and globalization on the income gap in 11 Central and Eastern European (CEE) countries (Bulgaria, Croatia, Czechia, Estonia, Latvia, Lithuania, Poland, Romania, Slovak Republic and Slovenia) for the period of 1996 to 2019, taking into consideration institutional factors. The study analyses the variables: transition coefficient as a proxy for income gap, GDP per capita, KOF Financial Globalisation Index, Financial Development Index and World Bank Institutional Indicators in a panel approach methodology and estimation of FMOLS and DOLS equations. The paper’s findings show that all considered factors have a significant contribution to the income gap in the examined period of time. Economic and financial development, as well as institutional quality, is positively associated with the closing income gap, while globalization has a negative influence. It is also revealed the direction of the causality relationship between the considered variables: from economic and financial development, globalization and institutional quality to the income gap. These findings suggest some policy recommendations in support of the continuation of the European integration process.

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Does financial development matter for economic growth in the emerging markets?

Cited by 75 publications

References 39 publications

The Causality and Uncertainty of the COVID-19 Pandemic to Bursa Malaysia Financial Services Index’s Constituents

The Causality and Uncertainty of the COVID-19 Pandemic to Bursa Malaysia Financial Services Index’s Constituents

Did China’s “National Sustainable Development Plan of Resource-Based Cities” Promote Economic Growth?

Does Financial Development, Globalisation and Institutional Quality Drive the Income Convergence in the Central and Eastern European Union Countries?

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