Too Much Finance?

Berkes, Enrico; Panizza, Ugo; Arcand, Jean‐Louis

doi:10.5089/9781475504668.001

Cited by 174 publications

(17 citation statements)

References 36 publications

Supporting

Mentioning

Contrasting

Unclassified

Order By: Relevance

“…A more recent line of research proposes an inverted U-relationship between financial development and long-term economic growth, suggesting that over-funding may exert a negative influence on economic growth [27,[31][32][33]. On the other hand, another line proposes that the direction of causality arose from the financial sector towards economic growth in the early stages of development, while the relationship was reversed in the more advanced economies [34][35][36][37][38][39][40].…”

Section: Theory and Hypothesesmentioning

confidence: 99%

Development of the Financial Sector and Growth of Microfinance Institutions: The Moderating Effect of Economic Growth

Sainz-Fernández¹,

Torre-Olmo²,

López-Gutiérrez³

et al. 2018

Sustainability

View full text Add to dashboard Cite

This article analyzes the moderating effect the degree of economic growth has on the relationship between the development of the financial system and the microfinance industry activity. The hypotheses proposed establish that the influence of the development of the financial system on the activity of the microfinance sector will be different depending on the level of economic growth. The estimates were made using the System-GMM methodology for panel data, which allows controlling the unobservable heterogeneity and the problems of endogeneity. We find that the degree of economic growth affects the relationship between the financial sector development and microfinance activity. Under negative economic growth conditions, the development of the financial sector has a negative impact on the activity of the microfinance sector, but when economic growth is high, the development of the financial sector positively influences the activity of the microfinance sector.

show abstract

Section: Theory and Hypothesesmentioning

confidence: 99%

Development of the Financial Sector and Growth of Microfinance Institutions: The Moderating Effect of Economic Growth

Sainz-Fernández¹,

Torre-Olmo²,

López-Gutiérrez³

et al. 2018

Sustainability

View full text Add to dashboard Cite

show abstract

“…Earlier studies (e.g., King and Levine, 1993b;Rajan and Zingales, 1998) document the positive effect of financial development on economic growth. Recent studies (e.g., Aizenman et al, 2015;Berkes et al, 2012;Cecchetti and Kharroubi, 2012;Cournède and Denk, 2015;Law and Singh, 2014;Sahay et al, 2015), however, find empirical evidence of nonlinearity of the finance-growth relationship. More importantly, the results on this relationship at both aggregate and disaggregate levels are mixed.…”

Section: Introductionmentioning

confidence: 99%

“…Second, based on empirical evidence on nonlinearity of the finance-growth relation (e.g., Berkes et al, 2012;Cecchetti and Kharroubi, 2012;Cournède and Denk, 2015;Law and Singh, 2014;Sahay et al, 2015), we argue that the relationship between banking sector Third, we examine whether banking sector development drives industrial development or vice versa. Empirical evidence suggests that the relationship between financial development and economic growth is bidirectional (see e.g., Nyasha and Odhiambo, 2014).…”

Section: Introductionmentioning

confidence: 99%

The impact of the banking sector on economic structure and growth

Tongurai

Vithessonthi

2018

International Review of Financial Analysis

View full text Add to dashboard Cite

In this paper, we study the impact of banking sector development on changes in economic structure and growth. We argue that banking sector development has differential effects on industrial sector development and agricultural sector development. We test whether economic structure and growth foster banking sector development. To test our hypotheses, we construct a panel sample of all countries in the world during 1960−2016. We find that banking sector development has a negative effect on agricultural sector development but exerts no effect on industrial sector development. The negative effect of banking sector development on agricultural sector development is only observed for countries with high degrees of banking sector development. Our results further show that agricultural sector development exerts a negative effect on banking sector development while industrial sector development has a positive effect on banking sector development.

show abstract

“…In contrast, faster credit growth can indicate unbalanced allocation of financial resources and signal an upcoming financial crisis'. In addition, Arcand et al (2012), Cecchetti and Kharroubi (2012) and Law and Singh (2014) have recently suggested that the rise in private credit might have a negative impact on growth above a threshold estimated at around 100 per cent of GDP. The problems are of the same nature for measures based on stock market capitalisation.…”

Section: Introductionmentioning

confidence: 99%

More Bankers, More Growth? Evidence from OECD Countries

Capelle-Blancard

Labonne

2011

SSRN Journal

View full text Add to dashboard Cite

We re-examine empirically the finance-growth relationship. We argue that financial deepening should not only be assessed via the familiar measures of financial activity output-the volume of credit-but also through its inputs-for example, the relative number of employees in the financial industry-or the efficiency of the financial-intermediation process. The latter is measured in this paper by the ratio of credit volume to the number of financial-sector employees. We compare these measures using the econometric approach recommended by Roodman (2009). Overall, we fail to find a positive relationship between financial deepening and economic growth in OECD countries over the last 40 years.(J.E.L.: G20). Paris 1 Panth eon-Sorbonne. The authors thank Agn es B enassy-Qu er e, Andrew Clark, J ezabel Couppey-Soubeyran and Val erie Mignon, as well as the referees for helpful comments. This work was carried out while the authors were affiliated to the CEPII. The usual disclaimer applies.

show abstract

Too Much Finance?

Cited by 174 publications

References 36 publications

Development of the Financial Sector and Growth of Microfinance Institutions: The Moderating Effect of Economic Growth

Development of the Financial Sector and Growth of Microfinance Institutions: The Moderating Effect of Economic Growth

The impact of the banking sector on economic structure and growth

More Bankers, More Growth? Evidence from OECD Countries

Contact Info

Product

Resources

About