An Empirical Study of Taiwan's 1978-2006 Financial Development, Export, Saving and Economic Growth

Vey Wang, Hai-Chun Yun and Lung-Sheng Lee ()
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Lung-Sheng Lee: Providence University

The African Finance Journal, 2012, vol. 14, issue 1, 87-101

Abstract: Since 1978, Taiwan has implemented a series of financial liberalization-related policies, including exchange rate liberalization, interest rate liberalization, and financial and foreign exchange market liberalization. The question of whether there exists a causal relationship between financial development and economic growth has always been an important research topic for economists. Using quarterly data from 1978 to 2006, we employ the augmented Dickey-Fuller unit root test, the co-integration test, and the causality test of the vector error correction model to explore this relationship. Our study shows that economic growth and financial development/export/saving seem to have a mutual feedback influence in the long run.

Keywords: Financial development; Taiwan; Economic growth; Causality (search for similar items in EconPapers)
JEL-codes: E44 O16 (search for similar items in EconPapers)
Date: 2012
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Persistent link: https://EconPapers.repec.org/RePEc:afj:journl:v:14:y:2012:i:1:p:87-101

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