 Finance-Growth Nexus Revisited: Empirical Evidence from Six CountriesSheilla Nyasha and Nicholas Odhiambo Scientific Annals of Economics and Business, 2018, vol. 65, issue 3, 247-268 Abstract: This paper investigates the dynamic causal relationship between bank-based financial development and economic growth, and between market-based financial development and economic growth in six countries during the period from 1980 to 2012. The causal relationship was found to vary largely across countries and over time. In general, bank-based financial development seems to Granger-cause economic growth in the UK and only in the long run in Australia. However, there is a feedback loop in Brazil and Australia, but only in the short run for the latter. In Kenya, South Africa and USA, the results support the neutrality hypothesis. The study results further indicate short-run unidirectional causality from market-based financial development to economic growth in the USA. Evidence of the feedback loop was found in Kenya, while the demand-following hypothesis found support only in South Africa and Brazil. However, the neutrality view was supported in Australia and the UK. Keywords: bank-based financial development; market-based financial development; economic growth; Granger-causality (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:vrs:aicuec:v:65:y:2018:i:3:p:247-268:n:6 Access Statistics for this article Scientific Annals of Economics and Business is currently edited by Ovidiu Stoica More articles in Scientific Annals of Economics and Business from Sciendo |
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