The Finance and Growth Nexus Re-Examined: Do All Countries Benefit Equally?

Adolfo Barajas (), Ralph Chami and Seyed Reza Yousefi ()
Additional contact information
Adolfo Barajas: International Monetary Fund, U.S.A.
Seyed Reza Yousefi: World Bank, U.S.A

Journal of Banking and Financial Economics, 2016, vol. 1, issue 5, 5-38

Abstract: A large theoretical and empirical literature has focused on the impact of financial deepening on economic growth throughout the world. This paper contributes to the literature by investigating whether this impact differs across regions, income levels, and types of economy. Using a rich data set for 150 countries for the period 1975–2005, dynamic panel estimation results suggest that the bene ficial effect of financial deepening on economic growth in fact displays measurable heterogeneity; it is generally smaller in oil exporting countries; in certain regions, such as the Middle East and North Africa (MENA); and in lower-income countries. Further analysis suggests that these differences might be driven by the degree of competition, and related to differences in the ability to provide widespread access to financial services.

Keywords: Growth; Financial Development; Inclusive Growth; Financial Access (search for similar items in EconPapers)
JEL-codes: G2 O0 O4 O5 O53 (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (14)

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Working Paper: The Finance and Growth Nexus Re-Examined: Do All Countries Benefit Equally? (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:sgm:jbfeuw:v:1:y:2016:i:5:p:5-38

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