Exploring the Root-Leaf Relationship between the Manufacturing and Financial Services Industry in Taiwan

Chin-Chen Chien (), Cheng Few Lee and Ya-Yun Cheng ()
Additional contact information
Chin-Chen Chien: Graduate Institute of Finance, National Cheng Kung University, No. 1, University Road, Tainan City 701, Taiwan
Ya-Yun Cheng: Department of International Business Management, Hsiuping Institute of Technology, No. 11, Gongye Rd., Dali City, Taichung County 412-80, Taiwan

Review of Pacific Basin Financial Markets and Policies (RPBFMP), 2008, vol. 11, issue 04, 493-509

Abstract: We employ the concept of Granger causality to investigate the root-leaf relationship between the manufacturing and financial services industry in Taiwan's economy. Our empirical results show that manufacturing led finance for the last half century, which is consistent with the pattern of other emerging economies. However, the liberalization of the financial services industry in the 1980s changed the relationship from "manufacturing leads, finance follows" to a feedback system. Accordingly, the financial services industry should play a more important role than previously for Taiwan to maintain its economic growth.

Keywords: Error correction model (ECM); Granger causality; economic growth (search for similar items in EconPapers)
JEL-codes: G1 G2 G3 (search for similar items in EconPapers)
Date: 2008
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.worldscientific.com/doi/abs/10.1142/S0219091508001441
Access to full text is restricted to subscribers

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:wsi:rpbfmp:v:11:y:2008:i:04:n:s0219091508001441

Ordering information: This journal article can be ordered from

DOI: 10.1142/S0219091508001441

Access Statistics for this article

Review of Pacific Basin Financial Markets and Policies (RPBFMP) is currently edited by Cheng-few Lee

More articles in Review of Pacific Basin Financial Markets and Policies (RPBFMP) from World Scientific Publishing Co. Pte. Ltd.
Bibliographic data for series maintained by Tai Tone Lim ().