Financial intermediation and growth: Causality and causes

Abstract

Levine, Loayza, and Beck evaluate techniques, they find that development of financial * Whether the level of development of financial intermediaries exerts a large causal impact on growth. intermediaries exerts a casual influence on economicThe data also show that cross-country differences in growth.legal and accounting systems help determine differences * Whether cross-country differences in legal and in financial development. accounting systems (such as creditor rights, contractTogether, these findings suggest that legal and enforcement, and accounting standards) explain accounting reform that strengthens creditor rights, differences in the level of financial development.contract enforcement, and accounting practices boosts Using both traditional cross-section, instrumental-financial development and accelerates economic growth. variable procedures and recent dynamic panel This papera product of Macroeconomics and Growth, Development Research Groupis part of a larger effort in the group to understand the links between the financial system and economic growth. Copies of the paper are available free from the World Bank,

Does Financial Development Necessarily Lead to Economic Growth? Evidence from China’s Cities, 2007–2014

“…[17] confirms this conclusion by using the generalized moments of method (GMM) for dynamic panel data on a panel of 71 countries over 1960-1995. From the perspective of econometric techniques, dynamic panel models allow the use of instrumental variables for all the explanatory variables so that more precise estimates could be obtained than cross-sectional data.…”

The impacts of financial development on growth: A time-varying causality analysis for Turkey

“…Our findings imply that financial development plays a role in economic growth for the Turkey, in line with Gupta (1984), Jung (1986, Neusser and Kugler (1998), King ve Levine (1993), Fry (1995, Levine ve Zervos (1998) Demetrias andHussein (1996), Choe and Moosa (1999), Rousseau and Watchell (2000), Shan vd. (2001), Beck et al (2000), Levine et al (2000), Christopoulos and Tsionas (2004), Dawson (2008).…”

“…While Beck et al (2000), Levine et al (2000), Christopoulos and Tsionas (2004), Dawson (2008), Hsueh et al (2013), Nazlioglu et al (2014) assert that financial development leads to economic growth, Kar et al (2011) claim financial development's role in growth process is ambiguous.…”

“…This parameter (PSC), is not only a criteria measuring development of banking sector but also shows the opportunities of new establishments in benefiting fiscal system through the bank (Baltagi et al, 2009). According to Levine et al (2000) financial systems that transfer more credit for private sector than public sector activate more savings. Herwartz and Walle (2014) suggest that this parameter (PSC) is more effective in measuring financial intermediation activity with regards to its exclusion of credits granted to public sector by the central bank.…”

Financing the Alternative: Renewable Energy in Developing and Transition Countries

“…For empirical studies of indirect financial sector taxes, see Chamley and Honohan (1990) and Giovannini and de Melo (1993). For more on institutions and financial intermediation, see La Porta et al (1997), Demirgüç-Kunt and Maksimovic (1998), Levine et al (2000), and Beck et al (2004a).…”