Financial Development and Economic Growth in Developing Asia

Estrada, Gemma; Park, Donghyun; Ramayandi, Arief

doi:10.2139/ssrn.1751833

Cited by 92 publications

(98 citation statements)

References 14 publications

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“…Inflation and government size tend to affect growth negatively, suggesting that macroeconomic instability and smaller private sector involvement in economic activities could be harmful for medium-to long-term growth. The findings are qualitatively similar to those of Estrada, Park, and Ramayandi (2010), who apply a panel fixed effects approach. We find, however, that the year of schooling variable has an insignificant effect on medium-to long-term growth.…”

Section: Resultssupporting

confidence: 83%

Financial Development, Financial Openness, and Economic Growth

2015

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. The views expressed in this paper are those of the authors and do not necessarily reflect the views and policies of the Asian Development Bank (ADB) or its Board of Governors or the governments they represent. Terms of use: Documents inADB does not guarantee the accuracy of the data included in this publication and accepts no responsibility for any consequence of their use.By making any designation of or reference to a particular territory or geographic area, or by using the term "country" in this document, ADB does not intend to make any judgments as to the legal or other status of any territory or area. Note: In this publication, "$" refers to US dollars.The ADB Economics Working Paper Series is a forum for stimulating discussion and eliciting feedback on ongoing and recently completed research and policy studies undertaken by the Asian Development Bank (ADB) staff, consultants, or resource persons. The series deals with key economic and development problems, particularly those facing the Asia and Pacific region; as well as conceptual, analytical, or methodological issues relating to project/program economic analysis, and statistical data and measurement. The series aims to enhance the knowledge on Asia's development and policy challenges; strengthen analytical rigor and quality of ADB's country partnership strategies, and its subregional and country operations; and improve the quality and availability of statistical data and development indicators for monitoring development effectiveness.

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Section: Resultssupporting

confidence: 83%

Financial Development, Financial Openness, and Economic Growth

2015

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“…Financial intermediation enhances further development in the financial sector which leads economy towards sustainable economic development through mobilization of economic resources thus augmenting investment toward improving efficiency and thereby higher economic productivity (Estrada, Park, & Ramayandi, 2009). While (Bakang, 2015) explained that financial development has significant effects on GDP.…”

Section: Qamruzzaman Innovation and Economic Growth: Evidence Frommentioning

confidence: 99%

Innovation and economic growth: evidence from financial institutional innovation

Qamruzzaman

2017

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Abstract:Innovation is the key to bringing changes in the traditional financial system. Innovation in the financial system being new financial products, hybrid financial institutions and new rules and regulations to reform existing financial system. Evolvement of financial institutions in the economy help economy in performing a financial function more effective and efficiently and such performance of financial institution promotes economic growth. The aim of the study to assess the relationship between institutional innovation and economic growth of Bangladesh over the period from 1991 to 2015. During this study, we employ the various econometric model to established association ship between institutional innovation and economic growth. Study results revealed that all the variables are stationary at level and after first difference all the variables become non-stationary. Test of Cointegration results revealed that innovation in the financial system through non-bank financial institutions and the financial market can contribute long run and CPI and spread rate can contribute in short run in the economic growth of Bangladesh. While Granger Causality Test revealed that Capital flow and GDP shows unidirectional causality but financial market development and GDP shows the Bidirectional causal relationship in the economy. It is also observed from causality analysis that capital flow and financial market development shows bidirectional causality, which indicated that innovation either in a financial institution or financial market can cause both variables and eventually influence on economic growth. So policymaker should consider the interrelationship between institutional innovation and economic growth while the formulation of economic policy because policy should expedite the development process in the financial system by making robust financial sector through encouraging financial innovation with banks, non-banks financial institution and capital market as well. Robust financial development can cause positively in overall economic growth in Bangladesh.

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“…The development of the financial system means that financial institutions are efficient in performing their responsibility of transforming mobilised deposits into credit for economic operators within an economy. Thus, for a financial system to be efficient there must be credit flowing more or less from the financial system to the real economy through the pooling of savings and allocation of capital to productive investments, among others (Levine, 2005;Estrada et al, 2010;Svirydzenka, 2016). In the long-run, the efficiency of the financial system can lead to the growth of the manufacturing sector and industrial development (Shahbaz & Lean, 2012;Udoh & Ogbuagu, 2012;Ewetan & Ike, 2014).…”

Section: Literature Reviewmentioning

confidence: 99%