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on Financial Development and Growth |
| By: | Cheng , Xiaoqiang (BOFIT); Degryse, Hans (BOFIT) |
| Abstract: | This paper provides evidence on the relationship between finance and high growth in China. Employing data for 27 Chinese provinces over the period 1995–2003, we assess the impact of banks and non-bank financial institutions on local economic growth. We argue that banks have had a larger impact than non-banks on local economic growth as they benefited earlier and more profoundly from China’s financial reforms than their non-bank counterparts. |
| Keywords: | growth; financial development; Chinese provinces; banks |
| JEL: | E44 G21 |
| Date: | 2008–02–04 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:bofitp:2007_022&r=fdg |
| By: | Panicos O. Demetriades; Jun Du; Sourafel Girma; Chenggang Xu |
| Abstract: | Using a large panel dataset of Chinese manufacturing enterprises during 1999-2005, which accounts for over 90% of China’s industrial output, and robust econometric procedures we show that the Chinese banking system has helped to support the growth of both firm value added and TFP. We find that access to bank loans is positively correlated with future value added and TFP growth. We also find that firms with access to bank loans tend to grow faster in regions with greater banking sector development. While the effects of bank loans on firm growth are more pronounced in the case of purely private-owned and foreign firms, they are positive and statistically significant even in the case of state-owned and collectively-owned firms. We show that excluding loss-making firms from the sample does not change the qualitative nature of our results. |
| Keywords: | Chinese banking system development; value added and TFP growth; panel dataset |
| JEL: | E44 O53 |
| Date: | 2008–02 |
| URL: | http://d.repec.org/n?u=RePEc:lec:leecon:08/6&r=fdg |
| By: | Antonio Ciccone (ICREA-Universitat Pompeu Fabra, Plaça de la Mercè, 10-12. 08002 Barcelona, Spain.); Marek Jarocinski (European Central Bank, Kaiserstrasse 29, 60311 Frankfurt am Main, Germany.) |
| Abstract: | Many factors inhibiting and facilitating economic growth have been suggested. Will international income data tell which matter when all are treated symmetrically a priori? We find that growth determinants emerging from agnostic Bayesian model averaging and classical model selection procedures are sensitive to income differences across datasets. For example, many of the 1975-1996 growth determinants according to World Bank income data turn out to be irrelevant when using Penn World Table data instead (the WB adjusts for purchasing power using a slightly different methodology). And each revision of the 1960-1996 PWT income data brings substantial changes regarding growth determinants. We show that research based on stronger priors about potential growth determinants is more robust to imperfect international income data. JEL Classification: E01, O47. |
| Keywords: | Growth regressions, robust growth determinants. |
| Date: | 2008–01 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20080852&r=fdg |