Financial development shocks and contemporaneous feedback effect on key macroeconomic indicators: A post Keynesian time series analysis

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

“…Firstly, our result that banking sector development Granger causes economic growth, lends support to the “ supply‐leading hypothesis (SLH) ”. This result appears in two of our samples (ADC and AOC) and is consistent with the findings of Menyah et al (2014), Pradhan, Arvin, Norman and Nishigaki (2014), Pradhan, Arvin et al (2013), Hsueh et al (2013), Bojanic (2012), Chaiechi (2012), Akinlo and Akinlo (2009), Nowbutsing (1999), Tsouma (2009), Enisan and Olufisayo (2009), Colombage (2009), Deb and Mukherjee (2008), Shahbaz, Ahmed, and Ali (2008), Nieuwerburgh et al (2006), and Levine and Zervos (1998).…”

“…The first body of the literature examines the link between banking sector development and economic growth. In this regard, Menyah et al (2014), Pradhan, Arvin, Norman and Nishigaki (2014), Hsueh et al (2013), Bojanic (2012), Chaiechi (2012), Jalil, Feridun, and Ma (2010), Kar, Nazlioglu, andAgir (2011), Wu, Hou, and, Abu-Bader and Abu-Qarn (2008), Ang (2008a,b), Naceur and Ghazouani (2007), Boulila and Trabelsi (2004), Christopoulos and Tsionas (2004), Calderon and Liu (2003), Al-Yousif (2002), Thakor (1996), Thornton (1994), Bencivenga and Smith (1991), and Greenwood and Jovanovic (1990) all demonstrated the validity of a "supply-leading" view, where unidirectional causality from banking sector development to economic growth is present. According to this view, banking sector development contributes to economic growth through two main channels: first, by raising the efficiency of capital accumulation and, in turn, the marginal productivity of capital (Goldsmith, 1969) and, second, by raising the savings rate and thus, the investment rate (McKinnon, 1973;Shaw, 1973).…”

The dynamics of information and communications technologies infrastructure, economic growth, and financial development: Evidence from Asian countries

“…In this context [26,37,42,44,50,58,69], establish the validity of financial development-led growth hypothesis (i.e., a DFH). At the same time [1,12,20,53,64,79,92,103], prove the validity of growth-led financial development hypothesis (i.e. a SLH).…”

Causality between the pillars of development and economic growth: a panel VAR application

“…Calderon and Liu (2003), Boulila and Trabelsi (2004), Christopoulos and Tsionas (2004), Ketteni et al (2007), Jalil et al (2010), Kar et al (2011), Chaiechi (2012, Hsueh et al (2013) and Pradhan (2013) have found evidence in support of the hypothesis of financial development-led growth (in other words, the supply leading hypothesis). By contrast, Levine (1997), Liang and Teng (2006), Ang and McKibbin (2007), Panopoulou (2009), Odhiambo (2010, Kar et al (2011) and Pradhan and Gunashekar (2013) have found evidence in favour of the hypothesis of growth-led financial development (in other words, the demand-following hypothesis).…”