Institutional development, financial deepening and economic growth: Evidence from China

Iftekhar Hasan, Paul Wachtel and Mingming Zhou ()

Journal of Banking & Finance, 2009, vol. 33, issue 1, 157-170

Abstract: There have been profound changes in both political and economic institutions in China over the last 20 years. Moreover, the pace of transition has led to variation across the country in the level of development. In this paper, we use panel data for the Chinese provinces to study the role of legal institutions, financial deepening and political pluralism on growth rates. The most important institutional developments for a transition economy are the emergence and legalization of the market economy, the establishment of secure property rights, the growth of a private sector, the development of financial sector institutions and markets, and the liberalization of political institutions. We develop measures of these phenomena, which are used as explanatory variables in regression models to explain provincial GDP growth rates. Our evidence suggests that the development of financial markets, legal environment, awareness of property rights and political pluralism are associated with stronger growth.

Keywords: China; Institutional; development; Financial; deepening; Political; pluralism; Economic; growth (search for similar items in EconPapers)
Date: 2009
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (184)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0378-4266(07)00387-1
Full text for ScienceDirect subscribers only

Related works:
Working Paper: Institutional Development, Financial Deepening and Economic Growth: Evidence from China (2007)
Working Paper: Institutional development, financial deepening and economic growth: evidence from China (2006)
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:eee:jbfina:v:33:y:2009:i:1:p:157-170

Access Statistics for this article

Journal of Banking & Finance is currently edited by Ike Mathur

More articles in Journal of Banking & Finance from Elsevier
Bibliographic data for series maintained by Catherine Liu ().