Does the level of financial leasing matter in the impact of bank lending on economic growth: Evidence from the global market (2006–2016)

Ying Zhang, Ling Zhai and Haijia Sun

Finance Research Letters, 2019, vol. 30, issue C, 352-359

Abstract: This paper investigates whether the level of financial leasing influenced the relationship between bank lending and economic growth in the global market from 2006 to 2016. The empirical results from a dynamic panel threshold effect model show that (1) a financial leasing threshold effect exists in the relation between bank loans and economic growth, (2) at a moderate level of financial leasing, the boost that is provided by bank loans significantly promotes economic growth, and (3) at a high level of financial leasing, the positive impact of an increase in bank loans on economic growth is no longer applicable. Therefore, the utilisation of traditional and emerging financing tools in various economies should be based on a country's economic structure and financial intermediary system.

Keywords: Economic growth; Bank loan; Financial leasing; Dynamic panel threshold effect model (search for similar items in EconPapers)
JEL-codes: G10 G21 G23 (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:30:y:2019:i:c:p:352-359

DOI: 10.1016/j.frl.2018.10.020

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