Endogenous Growth Models and Stock Market Development: Evidence from Four Countries

Caporale, Guglielmo Maria; Howells, Peter; Soliman, Alaa M.

doi:10.1111/j.1467-9361.2005.00270.x

Cited by 71 publications

(62 citation statements)

References 22 publications

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“…On the theoretical side endogenous financial growth models indicate mathematically how financial development may have a positive effect on the economic growth (Greenwood and Jovanovic, 1990;Bencivenga and Smith, 1991;Saint-Paul Gilles, 1992;King and Levine, 1993b). On the empirical side many cross-country studies provide empirical results which support also the positive relationship between finance and growth (Levine and Zervos, 1998;Levine, 1998;Benhabib and Spiegel, 2000;Beck and Levine, 2004;Caporale, Howells and Soliman, 2005). On the contrary some researchers like Minsky, Kindleberger advocates the negative effect of finance on the economic growth based on the occurrence of financial crisis (Stiglitz, 2000).…”

Section: Introductionmentioning

confidence: 89%

The Effect of the Domestic Debt on the Financial Development: A Case Study for Turkey

Altaylıgil¹,

Akkay²

2013

IJEF

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The aim of the study is to investigate the relationship between domestic public debt and financial development for the Turkish economy between 2002Q1-2012Q2. The previous panel data studies for developing countries suggest two main approaches. One view asserts a positive relationship between them while the other view asserts a negative relationship. Our results which are based on time-series analysis support the second view which advocates the negative relationship between domestic indebtedness and financial development. On the other hand we criticize the generalization of the results provided by other studies. According to our view each country may have different responses against the changes in domestic public debt due to its own specific economic and financial condition.

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Section: Introductionmentioning

confidence: 89%

The Effect of the Domestic Debt on the Financial Development: A Case Study for Turkey

Altaylıgil¹,

Akkay²

2013

IJEF

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“…Studies that support this assertion include Rousseau (1999), Xu (2000, Caporale et al (2004Caporale et al ( , 2005, Rousseau and Vuthipadadorn (2005), Chaudry (2007), Carp (2012), Hamdi et al (2013), and Asongu (2014). Of these studies, only Caporale et al (2004Caporale et al ( , 2005 and Carp (2012) used market-based financial development indicators. Rousseau (1999), Xu (2000), Rousseau and Vuthipadadorn (2005), Hamdi et al (2013), and Asongu (2014) Odhiambo (2010), however, found that investment Granger-causes financial development.…”

Section: Introductionmentioning

confidence: 99%

Financial Development, Savings and Investment in South Africa: A Dynamic Causality Test

Muyambiri

Odhiambo

2017

Glob. Econ. J.

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“…They differ only in the way the information is transmitted. Information in stock markets is contained in equity prices, while loan managers collect that in banks [6] . Dow [7] argued that if the main role of the stock markets to signal information for evaluation, financing and monitoring, banks may be equally effective at efficient resource allocation.…”

Section: Introductionmentioning

confidence: 99%

Credit Market Development and Economic Growth

Vazakidis¹,

Adamopoulos²

2009

American Journal of Economics and Business Administration

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Problem statement:This study investigated the relationship between credit market development and economic growth for Italy for the period 1965-2007 using a Vector Error Correction Model (VECM). Questions were raised whether economic growth spurs credit market development taking into account the negative effect of inflation rate on credit market development. This study aimed to investigate the short-run and the long-run relationship between bank lending, gross domestic product and inflation rate applying the Johansen cointegration analysis. Approach: For this objectives unit root tests were carried out according to Dickey-Fuller (1979) and Johansen cointegration analysis was applied to examine whether the variables are cointegrated of the same order taking into account the maximum eigenvalues and trace statistics tests. Finally, a vector error correction model was selected to investigate the long-run relationship between economic growth and credit market development. Results: A short-run increase of economic growth per 1% induces an increase of bank lending 0.4% in Italy, while an increase of inflation rate per 1% induces a relative decrease of bank lending per 0.5% in Italy. The estimated coefficient of error correction term is statistically significant and has a negative sign, which confirms that there is not any a problem in the long-run equilibrium between the examined variables. Conclusions: The empirical results indicated that economic growth has a positive effect on credit market development, while inflation rate has a negative effect. Bank development is determined by the size of bank lending directed to private sector at times of low inflation rates leading to higher economic growth rates.

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Endogenous Growth Models and Stock Market Development: Evidence from Four Countries

Cited by 71 publications

References 22 publications

The Effect of the Domestic Debt on the Financial Development: A Case Study for Turkey

The Effect of the Domestic Debt on the Financial Development: A Case Study for Turkey

Financial Development, Savings and Investment in South Africa: A Dynamic Causality Test

Credit Market Development and Economic Growth

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