Financial Development-Economic Growth Nexus: Theoretical Underpinnings, Empirical Evidence, and Critical Reflections
Ahmed Hunjra (),
Murugesh Arunachalam () and
Mahnoor Hanif ()
Additional contact information
Murugesh Arunachalam: University of Waikato
Mahnoor Hanif: University Institute of Management Sciences-PMAS-Arid Agriculture University
A chapter in Economic Growth and Financial Development, 2021, pp 155-178 from Springer
Abstract:
Abstract The discussion in this chapter rekindles the century-old debate on the association between Financial Development (FD) and Economic Growth (EG). This chapter draws from extant literature to discuss the nexus between FD and EG and provides insights on underlying theories, empirical evidence, methodologies adopted in prior studies that investigate and explain the relationship. The chapter also contextualizes the nexus in terms of the Islamic Banking Sector and provides a comparison of the contextualization in the Conventional Banking System. Critical reflections on the extant understandings of FD and EG relationship adds to the vigor of the debate presented in this chapter. Debates on FD–EG nexus have prevailed over several decades. Numerous theoretical and empirical writings postulate and provide evidence that FD promotes EG (Arestis et al., 2001). On contrary, other studies indicate insignificant (Ram, 1999) or no association between FD and EG. Yet some other studies reveal that EG promotes FD (Stolbov, 2013). This chapter presents a concise overview of the theories and empirical evidence that have emerged in extant literature around the FD-EG nexus. The chapter also argues that conventional theories on FD–EG nexus need to be expanded to include elements of social and environmental responsibilities in development and growth models. Concepts such as sustainable development and corporate social responsibility (CSR) have emerged prominent in growth and development models and popularized by United Nations conferences and international agreements on sustainable development. Extant CSR literature has revived the FD–EG debate, both in theoretical and empirical terms, and highlighted the significance of CSR and sustainable development for countries across the globe.
Date: 2021
References: Add references at CitEc
Citations: View citations in EconPapers (2)
There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.
Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
HTML/Text
Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-3-030-79003-5_9
Ordering information: This item can be ordered from
http://www.springer.com/9783030790035
DOI: 10.1007/978-3-030-79003-5_9
Access Statistics for this chapter
More chapters in Springer Books from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().