Financial development and economic growth: Recent evidence from China

Zhang, Jin; Wang, Lanfang; Wang, Susheng

doi:10.1016/j.jce.2012.01.001

Cited by 262 publications

(167 citation statements)

References 60 publications

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“…The inquiries made a little later about the impact of the development of financial systems on the economic trends at the in-country level (L. Guiso and others [12], X. Cheng, H. Degryse [13], J. Kendall [14], J. Zhang and others [15]), generally confirm the results of the intercountry analysis.…”

supporting

confidence: 63%

Complex Issues of Regional Growth Dependence on the Level of Financial Sector Development

Krinichanskii¹,

Fat'kin²

2017

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Importance The paper develops the area of endogenous economic growth theory that focuses on the relationships between financial development and economic dynamics at the national and sub-national levels. Objectives The study aims to identify regular differences in the level and statistical significance of the coefficients of regression models with financial development variables for groups of regions with different levels of financial sector development averaged for the studied period. Methods To estimate coefficients, we use an individual fixed-effect model. Regions are classified in terms of the composite index of density of banking services in the region. We use real GRP per capita as an indicator of economic dynamics. The analysis covers the panel data on 75 Russian regions for the period of 2002-2014. Results We found that the impact of financial development indices on economic growth is more intensive in groups of regions with a moderate level of financial development. Conclusions and RelevanceThe findings support the hypothesis on nonmonotonic dependence of finance and growth among different groups of Russian regions.

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confidence: 63%

Complex Issues of Regional Growth Dependence on the Level of Financial Sector Development

Krinichanskii¹,

Fat'kin²

2017

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“…Hsueh et al (2013) report that financial development stimulates economic growth in Asian countries including China. Zhang et al (2012) suggest that the traditional measures of financial development have a positive effect of financial development on economic growth. Adu et al (2013) argues that whether financial development affects economic growth positively or negatively depends on which proxy measure is being used for estimation purposes.…”

Section: Economic Growth Financial Development and Trade Opennessmentioning

confidence: 99%

The effects of Internet usage, financial development and trade openness on economic growth in South Africa: A time series analysis

Salahuddin

Gow

2016

Telematics and Informatics

194

113

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Please cite this article as: Salahuddin, M., Gow, J., The effects of Internet usage, financial development and trade openness on economic growth in South Africa: A time series analysis, Telematics and Informatics (2015), doi: http://dx.doi.org/10.1016/j.tele. 2015.11.006 This is a PDF file of an unedited manuscript that has been accepted for publication. As a service to our customers we are providing this early version of the manuscript. The manuscript will undergo copyediting, typesetting, and review of the resulting proof before it is published in its final form. Please note that during the production process errors may be discovered which could affect the content, and all legal disclaimers that apply to the journal pertain. and variance decomposition analysis. Based on these findings, this study recommends that the South African government continue with policies that aim to invest more resources into its Internet infrastructure to further expand its network and usage.

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“…Among these various sources, loans are considered more efficient than state appropriation in terms of capital allocation. [37]), we use this ratio to measure the substitution of more market-and profit-oriented financial transactions for state fiscal appropriation in order to allocate capital more efficiently.…”

Section: Variablesmentioning

confidence: 99%

Does Financial Development Necessarily Lead to Economic Growth? Evidence from China’s Cities, 2007–2014

Zhao

2017

MATEC Web Conf.

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Abstract. Using data from 286 Chinese cities over the period [2007][2008][2009][2010][2011][2012][2013][2014], this paper investigates the impact of financial development on economic growth. Our results from traditional cross-sectional regressions, first-differenced GMM and system GMM regressions all show that financial development does not have any significant positive effects on economic growth, while some indicators of financial development show significant negative effects on growth. Our results are consistent with many existing studies that a state-ruled banking sector, such as that of China, hinders economic growth because of the distoring nature of the government. To examine the sensitivity of our results, different sets of control variables sets are experimented with. Our results are shown to be robust. Our finding shows that to let the financial sector play a more efficient and effective role in promoting real economic growth, China has to further reform its financial system. IntroductionJoseph Schumpeter argued in his seminal work The Theory of Economic Development (1911) [1] that the services provided by financial intermediaries are essential for technological innovation and economic development. They mobilize savings, evaluate projects, manage risk, monitor mangers, and facilitate transactions. Earlier empirical works by Goldsmith (1969) [2] and McKinnon (1973) [3] illustrate the close ties between financial and economic development for a few countries. Numerous influential economists, however, believe that finance is a relatively unimportant factor in economic development. Notably, Robinson (1952) [4] argues that financial development simply follows economic development. Lucas (1988) [5] terms the relationship between financial and economic development 'over-stressed.' In this paper we study whether higher levels of financial development are positively associated with economic growth using data on 286 Chinese cities from 2007 through 2014.To examine whether Schumpeter (or Lucas) was right, we must define 'financial development' empirically. We construct four indicators of financial development that are designed to measure the services provided by financial intermediaries. First, we compute the traditional measure of financial depth, which equals the overall size of the formal financial intermediary system, i.e. the ratio of loans to GDP. Second, we measure the ability of financial intermediaries to mobilize capital, i.e., the ratio of deposits to GDP. Third, the ratio of households savings to GDP to measure the ability of financial intermediaries to attract household savings. Fourth, share of fixed asset investment financed by bank loans relative to state budgetary appropriation. It is believed that bank loans have more role than government appropriation in disciplinary the recipients. Although each financial indicator has shortcomings (sometimes due to data limitations), using this array of indicators provides a richer picture of financial development than if we used only a single measure.China ha...

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Financial development and economic growth: Recent evidence from China

Cited by 262 publications

References 60 publications

Complex Issues of Regional Growth Dependence on the Level of Financial Sector Development

Complex Issues of Regional Growth Dependence on the Level of Financial Sector Development

The effects of Internet usage, financial development and trade openness on economic growth in South Africa: A time series analysis

Does Financial Development Necessarily Lead to Economic Growth? Evidence from China’s Cities, 2007–2014

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