Socio-economic factors and the finance-growth nexus

Graff, Michael (2005) Socio-economic factors and the finance-growth nexus. European Journal of Finance, 11 3: 183-205. doi:10.1080/13518470410001674332


Author Graff, Michael
Title Socio-economic factors and the finance-growth nexus
Journal name European Journal of Finance   Check publisher's open access policy
ISSN 1466-4364
1351-847X
Publication date 2005-06-01
Sub-type Article (original research)
DOI 10.1080/13518470410001674332
Open Access Status
Volume 11
Issue 3
Start page 183
End page 205
Total pages 23
Place of publication Abingdon, United Kingdom
Publisher Routledge
Language eng
Subject 140212 Macroeconomics (incl. Monetary and Fiscal Theory)
Abstract The finance-growth nexus is discussed, and a framework for empirical analysis is formulated. Based on data for 93 countries from 1960–1990, a growth equation is estimated. It includes the standard regressors as well as a new proxy for financial activity and interaction effects of the latter with catching-up, education, and physical capital accumulation. Financial activity generally has a positive impact on economic growth. Then, the countries are ranked with respect to their degree of corporatism, institutional quality, democracy, market orientation and characteristics of their financial systems. The sample is split according to these control variables. It is shown that the finance-growth nexus is indeed contingent on socio-economic factors. Specifically, the growth effect of a given level of financial activity is higher in more law enforcing and more corporatist countries, whereas the results are inconclusive with respect to democracy, market orientation and financial structure.
Keyword Financial activity
Economic growth
Cross-country regressions
Institutional quality
Market orientation
Q-Index Code C1
Q-Index Status Confirmed Code
Institutional Status Non-UQ

Document type: Journal Article
Sub-type: Article (original research)
Collections: Excellence in Research Australia (ERA) - Collection
ERA 2012 Admin Only
School of Economics Publications
 
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Created: Thu, 19 Mar 2009, 21:45:15 EST by Ms Sarada Rao on behalf of School of Economics