Economic growth and financial development in Asian countries: A bootstrap panel Granger causality analysis

Shun-Jen Hsueh, Yu-Hau Hu and Chien-Heng Tu

Economic Modelling, 2013, vol. 32, issue C, 294-301

Abstract: This study using Kónya (2006) [Kónya, L. (2006). Exports and growth: Granger causality analysis on OECD countries with a panel data approach. Economic Modelling 23, 978–992.] method of bootstrap panel Granger causality analysis, which considers the issues of cross-sectional dependency and slope heterogeneity among countries investigated simultaneously, analyzes the causality between financial development and economic growth among ten Asian countries surveyed during period 1980 to 2007. We find that the direction of causality between financial development and economic growth is sensitive to the financial development variables used in the ten Asian countries examined in this work. Moreover, our findings support the supply-leading hypothesis, as many financial development variables lead economic growth in some of the ten Asian countries surveyed, especially in China.

Keywords: Economic growth; Financial development; Cross-sectional dependency; Slope heterogeneity; Granger causality; Bootstrap (search for similar items in EconPapers)
JEL-codes: F43 O10 O11 (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (88)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecmode:v:32:y:2013:i:c:p:294-301

DOI: 10.1016/j.econmod.2013.02.027

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