Revisiting the impact of financial depth on growth: A semi-parametric approach

Michael Polemis (), Thanasis Stengos and Nickolaos G. Tzeremes

Finance Research Letters, 2020, vol. 36, issue C

Abstract: We investigate the impact of financial depth on economic growth by using a flexible semi parametric model allowing for fixed effects along the lines of Baltagi and Li (2002). The results are robust under the two finance measures (domestic credit to private sector and broad money) and shed new light on the finance-growth nexus. We argue that this relationship appears to be very weak and tentative even though mildly nonlinear, regardless of the specification of the parametric part of the model.

Keywords: Financial depth; Growth; Nonlinear effects; Semi parametric fixed effects model (search for similar items in EconPapers)
JEL-codes: C14 F43 O15 (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (9)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:36:y:2020:i:c:s1544612319308785

DOI: 10.1016/j.frl.2019.101322

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