Financial intermediation and growth: Causality and causes
Ross Levine (),
Norman Loayza () and
Thorsten Beck
No 2059, Policy Research Working Paper Series from The World Bank
Abstract:
The authors evaluate: a) whether the level of development of financial intermediaries exerts a casual influence on economic growth; and b) whether cross-country differences in legal and accounting systems (such as creditor rights, contract enforcement, and accounting standards) explain differences in the level of financial development. Using both traditional cross-section, instrumental-variable procedures and recent dynamic panel techniques, they find that development of financial intermediaries exerts a large causal impact on growth. The data also show that cross-country differences in legal and accounting systems help determine differences in financial development. Together, these findings suggest that legal and accounting reform that strengthens creditor rights, contract enforcement, and accounting practices boosts financial development and accelerates economic growth.
Keywords: Financial Intermediation; Decentralization; Economic Theory&Research; Public Health Promotion; Payment Systems&Infrastructure; Financial Intermediation; Financial Economics; Achieving Shared Growth; Economic Theory&Research; Governance Indicators (search for similar items in EconPapers)
Date: 1999-02-28
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Citations: View citations in EconPapers (76)
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Related works:
Chapter: Financial Intermediation and Growth: Causality and Causes (2002) 
Journal Article: Financial intermediation and growth: Causality and causes (2000) 
Working Paper: Financial Intermediation and Growth: Causality and Causes (1999) 
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Persistent link: https://EconPapers.repec.org/RePEc:wbk:wbrwps:2059
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