Quantile Parameter Heterogeneity in the Finance-Growth Relation: The Case of OECD Countries

Sinem Guler Kangalli Uyar and Umut Uyar ()

Prague Economic Papers, 2018, vol. 2018, issue 1, 92-112

Abstract: This paper seeks to investigate the effect of financial development on growth in OECD countries during 1999-2014. The aim of the analysis is to study the dependence of growth on given financial development indicators along quantiles of the conditional growth distribution, taking into account the effect played by each country over time. For the purpose of the empirical analysis, it performed the instrumental variable quantile regression panel data (IV-QRPD) model suggested by Powell (2016). The findings of IV-QRPD model indicated that the effect of finance on growth is changing along quantiles of the conditional growth distribution. That is to say, we provide some evidence that high-growth OECD countries react to the changes in financial development less than low-growth countries.

Keywords: financial development; economic growth; panel quantile regression; instrumental variable (search for similar items in EconPapers)
JEL-codes: C21 C23 G10 O16 O40 (search for similar items in EconPapers)
Date: 2018
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Citations: View citations in EconPapers (3)

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DOI: 10.18267/j.pep.646

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