nep-dev New Economics Papers
on Development
Issue of 2005‒07‒25
three papers chosen by
Jeong-Joon Lee
Towson University

  1. Does external trade promote financial development? By Yongfu Huang; Jonathan Temple
  2. Finance and Growth: A Critical Survey By Alex W. Trew
  3. Growth, private investment and reforms : A comparative perspective By Ghazouani KAMEL

  1. By: Yongfu Huang; Jonathan Temple
    Abstract: Several recent papers have argued that trade and financial development may be linked, either for political economy reasons, or because foreign competition and exposure to shocks lead to changes in the demand for external finance. In this paper we use the cross-country and time-series variation in openness to study the relationship between trade and finance in more detail. Our results suggest that increases in goods market openness are typically followed by sustained increases in financial depth.
    Keywords: openness, trade, financial development.
    JEL: F13 O16
    Date: 2005–07
  2. By: Alex W. Trew
    Abstract: This paper surveys the literature on the relationship between finance and growth from a longitudinal, and primarily theoretical, perspective. Important qualifications to the empirical consensus are noted and we consider the prevalence of cross-section econometrics as dominant in shaping the present theoretical consensus. We develop a general model capable of capturing a number of key conclusions from theoretical research. We then trace out the numerical implications of this class of models for time-series growth, as well as outlining ways in which these models might be tested quantitatively for historical congruence. We suggest a reason for the preponderance of theoretical considerations of financial efficiency despite empirical analysis of financial deepness, and how this makes direct comparisons between the theory and empirics of finance and growth difficult. The core implications of many finance and growth theories are shown to be incongruent with the historical record.
    Keywords: finance and growth, endogenous growth, economic history.
    JEL: O11 O16 O40 N23
    Date: 2005–07
  3. By: Ghazouani KAMEL (Hight trade school of Tunis, Manouba University)
    Abstract: In this paper we empirically analyse the linkages among growth, investment and reforms in the South East Asian countries, in the North Africa and in the non CFA Sub-Saharan Africa economies over 1970-89 to 2003. These regions differ considerably among them selves as well as with regard to the rest of the world, in terms of resources endowment, structure of production , and also in terms of economic reforms , physical infrastructure, and human capital. Our empirical analysis has clearly revealed the importance and the complementarities between macroeconomic reforms, physical infrastructure, human capital and structural reforms for the growth prospects of the economies. These factors have shown a strong effect on growth and have contributed greatly to the growth process for north Africa countries and the non CFA sub Sahara African countries. In north Africa economies and in the Sub Sahara African countries, the lack of macroeconomic reforms, the deficiencies of the physical infrastructure and the human capital explain, although at differing degrees , well the deficit in economic growth. This has been particularly the case of road networks, electronic equipments, sanitary conditions and schooling. The model simulation shows that an improvement of secondary schooling and physical infrastructure, similar to South East Asia, would have stimulated North Africa economic growth by respectively 0.61percent and 0.17 percent against only 1.23 percent and 0.39 percent for non CFA Sub Saharan Africa
    Keywords: Growth , reforms, Human capital , Structural reforms, macroeconomic stability, PCA, investment, Panel
    JEL: C23 C82 E17 O40
    Date: 2005–07–22

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