The Role of Financial Development in Natural Resource Abundant Economies: Does the Nature of the Resource Matter?

Malebogo Bakwena () and Philip Bodman
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Malebogo Bakwena: MRG - School of Economics, The University of Queensland

No 2208, MRG Discussion Paper Series from School of Economics, University of Queensland, Australia

Abstract: The paper evaluates the role played by financial development in oil vis-à-vis non-oil (mining) economies using a panel data set for the period 1984-2003. A novel two-step, variance corrected system Generalized Method of Moments (GMM) estimator proposed by Windmeijer (2005) is applied to a dynamic panel of 44 developing economies. The data reveals that financial development plays a crucial role in influencing the efficiency of investment, thus economic performance of these economies. However, the potency of financial institutions is highly dependent on whether the economy is an oil or non-oil (mining) producer.

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Persistent link: https://EconPapers.repec.org/RePEc:qld:uqmrg6:22

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