Equilibrium loan contracts and endogenous growth in the presence of asymmetric information

Bose, Niloy; Cothren, Richard

doi:10.1016/s0304-3932(96)01275-5

Cited by 68 publications

(66 citation statements)

References 13 publications

Supporting

Mentioning

Contrasting

Unclassified

Order By: Relevance

“…Zhou (2011) and Rousseau and Wachtel (2000), who examine the role of the stock market as a part of financial development in regard to economic growth, also find positive impacts of financial development on economic growth. However, Bose and Cothren's (1996) research on endogenous growth and asymmetric information in the credit market suggests that an advanced financial sector only leads to higher growth rates after a certain level of financial sophistication has been achieved. Considering the indirect mechanism through economic growth, the majority of economic discourse is convinced of the positive effect of growth on reducing poverty (see Dollar and Kraay, 2002).…”

Section: Figure 1 Financial Development Economic Growth Inequalitymentioning

confidence: 99%

Finance and Inequality – Evidence from East Asia

Mansour¹,

Wendel²

2015

EJEF

View full text Add to dashboard Cite

The economic debate about inequality has occupied a huge place in the scientific discourse of the last decades. Several factors have been identified as causes for the rising wealth and income inequality in various regions such as economic growth, capital return and intergenerational wealth. In this paper, East Asia is chosen as a regional focus for the analysis due to the region's specific characteristics and history regarding inequality. Until the end of the 1980s, the region experienced a period of so-called "growth with equity" where high economic growth rates were associated with decreasing poverty and inequality. In recent years, however, growth in East Asia has gone hand in hand with inequality. This shift from "growth with equity" to "growth with inequality" makes the region worth investigating. The paper focuses particularly on the size of the financial sector, analyzing its role and impact on the development of inequality. Therefore, the theoretical connection and the natural relationship between poverty, inequality, economic growth as well as the size of the financial sector are discussed. Indicators, proxies and measurements for these variables are identified, based on existing literature. The main analysis delivers an answer to the research question of whether and how financial development affects the inequality in a society. For the analysis, cross-country and panel data for the ASEAN+3 countries from 1960-2012 are used.

show abstract

Section: Figure 1 Financial Development Economic Growth Inequalitymentioning

confidence: 99%

Finance and Inequality – Evidence from East Asia

Mansour¹,

Wendel²

2015

EJEF

View full text Add to dashboard Cite

show abstract

“…Rapidement, le système financier va devenir un des éléments de la stratégie de développement économique sous l'impulsion des auteurs comme Gurley et Shaw (1967), McKinnon (1973McKinnon ( , 1991, Shaw (1973), Fry (1988, 1989) et, King et Levine (1993c. On peut ajouter à cette liste, l'importante littérature sur la croissance endogène : Greenwood et Jovanovic (1990), Bencivenga et Smith (1991), Pagano (1993), Bose et Cothren (1996), Boyd et Smith (1996), Blackburn et Hung (1998), etc.…”

Section: L'argumentation Théoriqueunclassified

Intermédiation financière et croissance économique : une approche basée sur le concept d’efficacité-X appliquée à la zone UEMOA*

Igue

2014

View full text Add to dashboard Cite

Cet article étudie le lien entre l’efficacité de l’intermédiation financière et la croissance économique sur un panel de sept pays de l’UEMOA sur la période 1990-2008. Tout d’abord, un modèle théorique est présenté dans lequel l’efficacité de l’intermédiation bancaire renforce la croissance économique par le biais de l’amélioration de la productivité marginale du capital. Ensuite, l’efficacité du secteur bancaire est étudiée par le concept d’efficacité-X de Leibenstein (1966). Les scores d’efficacité bancaire sont estimés par la méthode DEA (Data Envelopment Analysis), appliquée à un modèle de production bancaire sur un échantillon de banques de l’UEMOA. Finalement, les scores moyens d’efficacité bancaire par pays sont calculés et utilisés comme indicateur de l’efficacité de l’intermédiation financière dans un modèle de croissance sur données de panel. Les résultats suggèrent l’existence d’une influence positive et significative de l’efficacité du secteur bancaire sur la croissance économique.This paper explores the connection between financial intermediation efficiency and economic growth on a panel of seven countries of WAEMU from 1990 to 2008. First, a theoretical model is presented in which financial efficiency enhances economic growth by means of increasing the marginal productivity of capital. Next, the banking sector efficiency is apprehended by the X-efficiency concept of Leibenstein (1966). Banking efficiency scores are estimated with Data Envelopment Analysis method, applied to banking production model on a sample of banks of the WAEMU. Finally, average scores of banking efficiency by country are calculated and used as indicator of financial intermediation efficiency in a growth model on panel data. Results suggest the existence of a positive impact of the banking sector efficiency on the economic growth

show abstract

“…Diamond (1984) shows that financial intermediaries reduce project monitoring costs, and this as shown by Bose and Cothren (1996), promotes resources allocation, thereby leading to economic growth. Likewise, Blackburn and Hung (1998) show that financial intermediaries manage the moral hazard problem by designing incentive-compatible loan contracts.…”

Section: Introductionmentioning

confidence: 99%

“…1 ameliorating the problem of information asymmetry (Diamond, 1984;Bose and Cothren, 1996;Blackburn and Hung, 1998;Morales, 2003;Blackburn et al, 2005) 2 increasing efficiency of investments (Greenwood and Jovanovic, 1990) 3 enhancing investment productivity (Saint-Paul, 1992) 4 providing liquidity, thereby allowing capital accumulation (Bencivenga and Smith, 1991) 5 allowing human capital formation (De Gregorio and Kim, 2000). Diamond (1984) shows that financial intermediaries reduce project monitoring costs, and this as shown by Bose and Cothren (1996), promotes resources allocation, thereby leading to economic growth.…”

Section: Introductionmentioning

confidence: 99%

“…The foregoing theoretical models differ in that while most of them consider the existence of only financial intermediaries (see Bose and Cothren, 1996;Blackburn et al, 2005;Blackburn and Hung, 1998;De Gregorio and Kim, 2000;Morales, 2003), some consider only financial markets (see Saint-Paul, 1992), and others consider both financial markets and intermediaries (see Greenwood and Jovanovic, 1990;King and Levine, 1993b;de la Fuente and Marín, 1996;Greenwood and Smith, 1997;Aghion et al, 2005). Differences are also apparent in terms of scholars' prediction of the direction of causality between finance and growth.…”

Section: Introductionmentioning

confidence: 99%

See 1 more Smart Citation

Bond markets, stock markets, banks and growth: a system GMM analysis

Fanta

2017

GBER

View full text Add to dashboard Cite

Empirical studies on the finance-growth nexus largely focus on banks and stock markets to the exclusion of bond markets. Furthermore, such important events as bank crisis are neglected in most finance-growth models. The major aim of this paper is therefore to throw light at the finance growth link by accounting for bond markets and controlling for banking sector crisis using data on economic growth and financial development indicators of 36 economies comprising 21 advanced and 15 emerging economies. Applying a system generalised-method-of-moments (GMM) technique, the study revealed that bond markets rather than banks and stock markets are related to economic growth in advanced economies, and the same relationship is not found for emerging economies. It is further observed that the finance-growth link depends on the specific measures used to gauge financial development. This study also confirms previous findings that crisis dampens the finance-growth link. Two important inferences could be made from the results of this study. First, the often reported positive link between finance and growth might be caused by aggregation of countries of different economic growth and financial development. Second, the finance growth link depends on the measures of financial development used.

show abstract

Equilibrium loan contracts and endogenous growth in the presence of asymmetric information

Cited by 68 publications

References 13 publications

Finance and Inequality – Evidence from East Asia

Finance and Inequality – Evidence from East Asia

Intermédiation financière et croissance économique : une approche basée sur le concept d’efficacité-X appliquée à la zone UEMOA*

Bond markets, stock markets, banks and growth: a system GMM analysis

Contact Info

Product

Resources

About