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Access to Finance Thresholds and the Finance-Growth Nexus

Riadh Ben Jelili () and Walid Abdmoulah

MPRA Paper from University Library of Munich, Germany

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 cross-country 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)
JEL-codes: C54 E20 (search for similar items in EconPapers)
Date: 2013-12, Revised 2012
New Economics Papers: this item is included in nep-fdg and nep-mac
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