Access to Finance Thresholds and the Finance-Growth Nexus

Riadh Ben Jelili () and Walid Abdmoulah
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Walid Abdmoulah: Arab Planning Institute

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Abstract: Based on Aghion et al. (2005), this article provides new insights regarding whether financial development can affect economic growth non-linearly by adopting the concept of threshold effects. The empirical approach adopted in this article allows for the finance-growth relationship to be piecewise linear with a set of indicators including access to finance acting as a regime-switching trigger. Using crosscountry observations from 144 countries stretching from 1985 to 2009, strong evidence of threshold effects in finance-growth link is found. It is suggested that financial development in general, and access to finance in particular, is among the important forces contributing to crosscountry (non)-convergences in growth rates.

Keywords: Financial development; Access to finance; Economic growth; Threshold regression (search for similar items in EconPapers)
Date: 2013-12
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Citations: View citations in EconPapers (4)

Published in Economic Papers: A journal of applied economics and policy, 2013, 32 (4), pp.522 - 534. ⟨10.1111/1759-3441.12059⟩

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Related works:
Journal Article: Access to Finance Thresholds and the Finance-Growth Nexus (2013)
Working Paper: Access to Finance Thresholds and the Finance-Growth Nexus (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-03840532

DOI: 10.1111/1759-3441.12059

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