Financial development and economic growth: The case of eight Asian countries

Dipendra Sinha () and Joseph Macri

MPRA Paper from University Library of Munich, Germany

Abstract: This paper looks at the relationship between financial development and economic growth using time series data for eight Asian countries. First, we estimate augmented production functions where a financial development variable is added. Second, we conduct multivariate causality tests between the growth rate of income and the growth rates of the financial development variables. The regression results show a positive and significant relationship between the income variables and financial variables for India, Malaysia, Pakistan and Sri Lanka. The multivariate causality tests show a two-way causality relationship between the income and the financial variables for India and Malaysia, one-way causality from financial variables to income variables for Japan and Thailand and reverse causality for Korea, Pakistan and Philippines. Thus, our empirical results do not unambiguously support the general view of a clear and positive relationship between financial development and economic growth.

Keywords: finanacial development; economic growth; Asian countries (search for similar items in EconPapers)
JEL-codes: C32 E51 O10 (search for similar items in EconPapers)
Date: 2001
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (23)

Published in Economia Internazionale 2.54(2001): pp. 219-234

Downloads: (external link)
https://mpra.ub.uni-muenchen.de/18297/1/MPRA_paper_18297.pdf original version (application/pdf)

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:pra:mprapa:18297

Access Statistics for this paper

More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Joachim Winter ().