The causal relationship between financial development and economic growth: an experience with BRICS economies
K. Siva Kiran Guptha () and
R. Prabhakar Rao ()
Additional contact information
K. Siva Kiran Guptha: Sri Sathya Sai Institute of Higher Learning
R. Prabhakar Rao: Sri Sathya Sai Institute of Higher Learning
Journal of Social and Economic Development, 2018, vol. 20, issue 2, No 7, 308-326
Abstract In recent years, the emerging economies of the world, particularly those of the BRICS countries, have attracted increasing attention for their contribution to the growth of the global economy. These countries have initiated significant reforms within financial institutions and financial markets that are vital to the expansion of the financial sector and thus to the countries’ economic growth. In this context, this study aims to determine whether the development of the financial system in these economies is the cause for their growth. To measure the financial system development, the study constructs three broad-based indices—the financial institution development index, financial market development index, and financial system development index—for each economy using principal component analysis, with the factors of depth, efficiency, and stability of financial institutions and financial markets as variables. In addition, we use the Toda–Yamamoto causality test to conduct this exercise for the period 1996–2016. The results of the study reveal that there is no uniformity in finance and growth causality among the BRICS countries.
Keywords: BRICS; Financial system; Toda–Yamamoto Granger causality; Economic growth (search for similar items in EconPapers)
JEL-codes: C38 G2 O5 (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed
Downloads: (external link)
http://link.springer.com/10.1007/s40847-018-0071-5 Abstract (text/html)
Access to the full text of the articles in this series is restricted.
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:spr:jsecdv:v:20:y:2018:i:2:d:10.1007_s40847-018-0071-5
Ordering information: This journal article can be ordered from
Access Statistics for this article
Journal of Social and Economic Development is currently edited by M.G. Chandrakanth, D. Rajasekhar, Anand Inbanathan and S. Madheswaran
More articles in Journal of Social and Economic Development from Springer, Institute for Social and Economic Change
Bibliographic data for series maintained by Sonal Shukla ().