The effects of household and firm credit on growth: New evidence from a panel of developed and developing countries

Mohamed Goaied and Amira Gasmi

Australian Economic Papers, 2021, vol. 60, issue 3, 544-561

Abstract: We use two panel data techniques in a novel large dataset to assess the dynamic interactions of household and enterprise credit with growth in developed and developing countries. Panel vector autoregressive (VAR) results reject the hypothesis that finance only follows economic growth. Instead, both panel techniques provide strong evidence that higher allocations of household credit are an impediment to economic growth regardless of a country's level of development. Otherwise, empirical results confirm that firm credit expansions are conducive to economic growth; however, this effect is not immediate in developing countries but it appears with a 1‐year delay. Our results provide evidence that the credit‐growth nexus changes over time and during the development process. These findings may explain the ambiguous and vanishing effect of finance on growth in recent literature.

Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://doi.org/10.1111/1467-8454.12218

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:bla:ausecp:v:60:y:2021:i:3:p:544-561

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0004-900X

Access Statistics for this article

Australian Economic Papers is currently edited by Daniel Leonard

More articles in Australian Economic Papers from Wiley Blackwell
Bibliographic data for series maintained by Wiley Content Delivery ().