A nonparametric model of financial system and economic growth

Sagarika Mishra and Paresh Narayan ()

International Review of Economics & Finance, 2015, vol. 39, issue C, 175-191

Abstract: In this paper, we show that in the proposed models for economic growth, the financial system variables are generally nonparametric. We, thus, use a nonparametric panel data model to estimate the financial system–economic growth relationship. Our results suggest that as long as a country's domestic credit and private credit are above their cross-sectional mean they have a positive effect on GDP growth. We also discover that market capitalisation positively and significantly impacts GDP growth, while stocks traded (with the exception of OECD countries) has a statistically insignificant effect on GDP growth.

Keywords: Financial system; Economic growth; Nonparametric model (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (32)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:reveco:v:39:y:2015:i:c:p:175-191

DOI: 10.1016/j.iref.2015.04.004

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