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Finance and the Sources of Growth at Various Stages of Economic Development

Year: 2003

Type: article

Abstract: This article studies the effects of financial development on the sources of growth in different groups of countries. Recent theoretical work shows that financial development may affect productivity and capital accumulation in different ways in industrial versus developing countries. This hypothesis is tested with panel data from 74 countries using GMM dynamic panel techniques. Results are consistent with the hypothesis: finance has a strong positive influence on productivity growth primarily in more developed economies. In less developed economies, the effect of finance on output growth occurs primarily through capital accumulation.

Source: Economic Inquiry

DOI: 10.1093/ei/cbh049

Authors: Felix Rioja, Neven Valev

Institution: Georgia State University

Language: English

Topic: Monetary Policy and Economic Impact

Subfield: General Economics, Econometrics and Finance

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDG: Decent work and economic growth

Open Access status: green

OpenAlex ID: W3124223798

FWCI: 17.02

Cites: 59

Cited by: 627

Related to: 10