Financial development and growth: A clustering and causality analysis

Chow, William W.; Fung, Michael K.

doi:10.1080/09638199.2011.570364

Cited by 33 publications

(26 citation statements)

References 33 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…It should be stated that there is an emerging literature that asserts causality from growth to financial development, accounting, of course, for the eventuality that the causality could be bi-directional. On this, see Chow and Fung (2013) and references therein. 4.…”

Section: Resultsmentioning

confidence: 95%

Financial liberalization and remittances: Recent panel evidence

Bang

Mitra

Wunnava

2015

The Journal of International Trade & Economic Development

View full text Add to dashboard Cite

We investigate the impact of financial liberalization on remittances to 84 countries over the period 1986-2005. Explicitly accounting for the multidimensionality of financial reform, we find that the various dimensions impact remittances differently: Increased economic freedom in the financial sector, as captured by absence of direct government control over the allocation of credit, has a positive and immediate impact. However, the improved robustness of financial markets, as captured by the development of security markets, improvement in the quality of banking supervision, and removal of stringent restrictions on interest rates and international capital, has a negative and lagged effect. The net combined effect reveals that financial liberalization may have a modest negative impact on remittances in the long run.

show abstract

Section: Resultsmentioning

confidence: 95%

Financial liberalization and remittances: Recent panel evidence

Bang

Mitra

Wunnava

2015

The Journal of International Trade & Economic Development

View full text Add to dashboard Cite

show abstract

“…Due to the fact that South Africa recorded negative growth rates in some fiscal years, the use of 38 observations for each variable in this paper has been dictated by the deletion of these negative growth rates from the data. Credit extended to the private sector represents credit given by both depository and nondepository institutions to the private sector and exclude those extended to the public sector because it is submitted that credit to the private sector normally produces higher returns and is more likely to reflect fluctuations in the level of intermediated finance (Chow & Fung, 2013;Rousseau & Vuthipadadorn, 2005;Xu, 2000). Chow and Fung (2013) use the level of financial intermediation measured by credit extended to the private sector as proxy for financial development.…”

Section: Data and Variablesmentioning

confidence: 99%

“…Since the pioneering work by Goldsmith (1969), which lends some credence to the theoretical postulation of Schumpeter (1911) that finance has positive implications for a country's growth trajectory, the growth literature has been flooded with an avalanche of empirical investigations into channels through which the dynamics of financial variables influence capital accumulation and growth (Adeniyi, Oyinlola, Omisakin, & Egwaikhide, 2015;Adusei, 2012Adusei, , 2013Aghion, Howitt, & Mayer-Foulkes, 2005;Alaabed & Masih, 2016;Chow & Fung, 2013;Deidda & Fattouh, 2002;Demirguc-Kunt & Levine, 2008;Ibrahim & Alagidede, 2017;Jalil & Feridun, 2011;King & Levine, 1993;Levine, Loayza, & Beck, 2000;Rioja & Valev, 2004;Ruiz-Vergara, 2017;Saint-Paul, 1992;Sassi & Goaied, 2013;Tran, 2008;Waqabaca, 2004). Unfortunately, these investigations have produced inconclusive results.…”

Section: Introductionmentioning

confidence: 99%

The finance–growth nexus: Does risk premium matter?

Adusei

2018

Int. J Fin Econ

View full text Add to dashboard Cite

The bounds testing approach to cointegration analysis is employed in this paper to examine whether the risk premium demanded by the banking sector moderates the finance–growth nexus with data (1970–2015) from South Africa. To the extent that the interaction between risk premium and financial development positively affects growth in the long run, we affirm that the risk premium demanded by the banking sector represents a significant channel through which financial development drives growth. The main policy implication of this finding is that financial liberalization that removes interest rates restrictions, allowing the banking sector to adequately price risk, is in the best interest of the South African economy.

show abstract

“…Not surprisingly, the relationship between financial development 1 and economic growth has been an important area of discussion among researchers and policy makers (see, for instance, Levine, 1999;Luintel & Khan, 1999;Al-Yousif, 2002;Ang, 2008a,b;Bangake & Eggoh, 2011;Chow & Fung, 2011;Fase & Abma, 2003;Herwartz & Walle, 2014;Jung, 1986;King & Levine, 1993a,b;Levine, 2003;Mukhopadhyay, Pradhan, & Feridun, 2011;Wachtel, 2003;Rousseau & Yilmazkuday, 2009;Yucel, 2009). However, what remains unclear is the issue of cointegration and causality between banking sector development and stock market development.…”

Section: Introductionmentioning

confidence: 99%

Causal nexus between economic growth, banking sector development, stock market development, and other macroeconomic variables: The case of ASEAN countries

et al. 2014

View full text Add to dashboard Cite

This paper examines the relationship between banking sector development, stock market development, economic growth, and four other macroeconomic variables in ASEAN countries for the period 1961–2012. Using principal component analysis for the construction of the development indices and a panel vector auto‐regressive model for testing the Granger causalities, this study finds the presence of both unidirectional and bidirectional causality links between these variables. The study contributes to understanding the importance of the interrelationship between the variables and combines the different strands of the literature. It also contributes to the literature by focusing on a group of countries that have not been studied before. One particular policy recommendation is to make the banking sector more accessible for those country's inhabitants that do not have bank accounts. Another policy recommendation is to nurture stock market development, which will facilitate the increased raising of capital for investment purposes to enhance economic growth.

show abstract

Financial development and growth: A clustering and causality analysis

Cited by 33 publications

References 33 publications

Financial liberalization and remittances: Recent panel evidence

Financial liberalization and remittances: Recent panel evidence

The finance–growth nexus: Does risk premium matter?

Causal nexus between economic growth, banking sector development, stock market development, and other macroeconomic variables: The case of ASEAN countries

Contact Info

Product

Resources

About