Deregulation, financial deepening and economic growth: The case of Latin America

Nazmi, Nader

doi:10.1016/j.qref.2004.12.014

Cited by 27 publications

(17 citation statements)

References 19 publications

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“…They also find that growth tends to be higher if institutional reforms precede liberalization and, in contrast to other studies, a permanent growth effect of about 0.4 percent a year in an extended sample of 72 countries. Nazmi (2005) uses data for five Latin American countries and finds evidence that deregulation of stock market increases investment and growth. On a microeconomic side, Fisman and Love (2003), Gupta and Yuan (2006), and Bekaert et al (2007) show that industries that face better growth opportunities grow significantly faster after stock market liberalization, although the effect is no longer significant when the average effect of liberalization is controlled for.…”

Section: H1mentioning

confidence: 99%

Does stock market liberalization spur financial and economic development in the MENA region?

Naceur

Ghazouani²,

Omran

2008

Journal of Comparative Economics

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Section: H1mentioning

confidence: 99%

Does stock market liberalization spur financial and economic development in the MENA region?

Naceur

Ghazouani²,

Omran

2008

Journal of Comparative Economics

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“…Nazmi (2005) uses data for five Latin American countries and finds evidence that deregulation of financial markets increases investment and growth. Bekaert, Harvey and Lundblad (2005) for a large sample of countries look at liberalization of the stock market, in particular opening them up to foreign participation.…”

Section: Financial Liberalization and Growth: The Evidencementioning

confidence: 99%

Does Financial Liberalization Influence Saving, Investment and Economic Growth? Evidence from 25 Emerging Market Economies, 1973-1996

Hermes

2005

SSRN Journal

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This paper aims to investigate the relationship between financial liberalization on the one hand and saving, investment and economic growth on the other hand, using a new dataset for measuring financial liberalization for a sample of 25 developing economies over the period 1973-96. We find no evidence that financial liberalization affects domestic saving and total investment (although there are some signs to believe that liberalization may actually reduce rather than increase domestic saving), whereas it is positively associated with private investment, as well as with per capita GDP growth. We find a negative relationship between financial liberalization and public investment. These results suggest that financial liberalization leads to a substitution from public to private investment, which may contribute to higher economic growth.

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“…They argue that this finding is due to the fast financial liberalization experienced at the time that, without proper regulation, led to macroeconomic volatility. On the other hand, Nazmi (2005) finds, using a panel data of five Latin American countries from 1960 to 1995, that financial development has a significant positive effect on investment. Because there has been a significant change in the financial sector in the late 1990s and early 2000s in Latin America (see Figure 1), it is important to analyze the relationship between financial development and economic growth using current data.…”

Section: The Latin American Casementioning

confidence: 95%

The Finance–Growth Link in Latin America

Blanco

2009

Southern Economic Journal

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This paper analyzes the relationship between financial development and economic growth in Latin America with a Granger causality test and impulse response functions in a panel vector autoregression model. Using annual observations from a sample of 18 countries from 1962 to 2005, it is shown that while economic growth causes financial development, financial development does not cause economic growth. This finding is robust to different model specifications and different financial indicators. Interestingly, when the sample is divided according to different income levels and institutional quality, there is two way causality between financial development and economic growth only for the middle income group and for countries with stronger rule of law and creditor rights. The impulse response functions show that a shock to financial development has a positive impact on economic growth only for these subsamples, but the net effect of financial development on growth is relatively small. * Acknowledgements: This paper benefited greatly from comments by Robin and Kevin Grier; all their help is greatly appreciated. I am thankful to Inessa Love for making her code for panel VAR available to me and Haichun Ye for her help in the empirical part. I also thank James Prieger for helpful comments, Michelle Isenhouer for research assistance, and Luis Rodriguez for graphics editing. Two anonymous referees have made valuable comments, which helped to improve the paper significantly. Any remaining errors are my own.

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Deregulation, financial deepening and economic growth: The case of Latin America

Cited by 27 publications

References 19 publications

Does stock market liberalization spur financial and economic development in the MENA region?

Does stock market liberalization spur financial and economic development in the MENA region?

Does Financial Liberalization Influence Saving, Investment and Economic Growth? Evidence from 25 Emerging Market Economies, 1973-1996

The Finance–Growth Link in Latin America

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