The Influence of Financial Market Development on Economic Growth in BRICS Countries

Wait Charles (), Tafadzwa Ruzive and le Roux Pierre ()
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Wait Charles: Department of Economics, Nelson Mandela Metropolitan University, Port Elizabeth, Republic of South Africa
le Roux Pierre: Department of Economics, Nelson Mandela Metropolitan University, Port Elizabeth, Republic of South Africa

International Journal of Management and Economics, 2017, vol. 53, issue 1, 7-24

Abstract: The debate about the influence of financial market development on economic growth has been ongoing for more than a century. Since Schumpeter [1912] wrote about the happenings on Lombard Street there has been growing interest in the way financial market development affects economic activity and growth. As development issues have deepened, inquiry into the finance-growth nexus has also grown, with recent research focusing on various aspects of financial crisis and developments in the BRICS economies. This study investigates the influence of financial market development on the higher growth of BRICS as compared to non-BRICS counterparts. The research utilizes the Generalised Method of Moments and an extended endogenous growth model to estimate the influence of a set of financial market indicators. We find that higher private sector levels of credit and financial depth in the BRICS economies contributed to the economic growth of those economies.

Keywords: Financial Market Development; economic growth; BRICS (search for similar items in EconPapers)
JEL-codes: O43 (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:vrs:ijomae:v:53:y:2017:i:1:p:7-24:n:2

DOI: 10.1515/ijme-2017-0002

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