Financial indicators and growth in a cross section of countries
Robert King () and
Ross Levine ()
No 819, Policy Research Working Paper Series from The World Bank
Abstract:
The authors use existing measures of the financial system - and construct many new measures - to document the relationship between the financial system and long-run growth in a cross-section of countries between 1960 and 1989. They consider various measures of the size of the financial system, the importance of different financial institutions, the financial system's allocation of credit, the financial system's efficiency, and the degree of financial repression. They use graphs, correlations, and regressions to gauge the robustness of the partial correlation between growth and the financial indicators. They also examine two channels through which financial indicators may be linked to growth: the share of GDP allocated to investment; and the efficiency with which resources are used. They find that many of the financial system indicators are significantly correlated with growth through both investment and efficiency. Moreover, many of these partial correlations remain strong after controlling for initial conditions, dummy variables for Africa and Latin America, and measures of monetary, fiscal, and trade performance. Their analysis suggests that it is empirically important to identify which financial intermediaries aredoing the intermediation and to whom the financial system is allocating credit rather than simply using proxies for the overall size of the financial system, as has been common in past studies.
Keywords: Economic Theory&Research; Macroeconomic Management; Financial Economics; Achieving Shared Growth; Governance Indicators (search for similar items in EconPapers)
Date: 1992-01-31
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (50)
Downloads: (external link)
http://www-wds.worldbank.org/external/default/WDSC ... d/PDF/multi_page.pdf (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:wbk:wbrwps:819
Access Statistics for this paper
More papers in Policy Research Working Paper Series from The World Bank 1818 H Street, N.W., Washington, DC 20433. Contact information at EDIRC.
Bibliographic data for series maintained by Roula I. Yazigi ().