Private investment and financial development in a globalized world

Yongfu Huang

Bristol Economics Discussion Papers from School of Economics, University of Bristol, UK

Abstract: Using recently developed panel data techniques on data for 43 developing countries over the period 1970-98, this paper provides an exhaustive analysis of causality between aggregate private investment and financial development. GMM estimation on averaged data, and a common factor approach on annual data allowing for global interdependence and heterogeneity across countries suggest positive causal effects going in both directions. The finding has rich implications for the development of financial markets and the conduct of macroeconomic policies in developing countries in an integrated global economy.

Keywords: Private Investment; Financial Development; Global Interdependence; Common Factor Analysis; Panel Unit Root Test; Panel Cointegration Test (search for similar items in EconPapers)
JEL-codes: E22 E44 F36 F41 (search for similar items in EconPapers)
Pages: 49 pages
Date: 2006-07
New Economics Papers: this item is included in nep-fdg, nep-fin, nep-fmk, nep-mac and nep-sea
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (15)

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Journal Article: Private investment and financial development in a globalized world (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:bri:uobdis:06/589

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