The Finance and Growth Nexus Re-Examined: Do All Countries Benefit Equally?
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Summary:
A large theoretical and empirical literature has focused on the impact of financial deepening on economic growth throughout the world. This paper contributes to the literature by investigating whether this impact differs across regions, income levels, and types of economy. Using a rich dataset for 150 countries for the period 1975–2005, dynamic panel estimation results suggest that the beneficial effect of financial deepening on economic growth in fact displays measurable heterogeneity; it is generally smaller in oil exporting countries; in certain regions, such as the Middle East and North Africa (MENA); and in lower-income countries. Further analysis suggests that these differences might be driven by regulatory/supervisory characteristics and related to differences in the ability to provide widespread access to financial services.
Series:
Working Paper No. 2013/130
Subject:
Banking Commercial banks Commodities Credit Financial institutions Financial markets Money National accounts Oil Personal income Stock markets
English
Publication Date:
May 29, 2013
ISBN/ISSN:
9781484372104/1018-5941
Stock No:
WPIEA2013130
Pages:
47
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