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on Financial Development and Growth |
| By: | Prats Albentosa, María Asuncíon; Sandoval, Beatriz |
| Abstract: | A developed financial system is essential in a market economy. This paper studies the importance of the development of financial markets in general, and the stock market in particular, from the review of existing literature in the area of the relationship between financial development and economic growth, and especially, the link between the stock market and economic growth. Through an empirical analysis for six countries in Eastern Europe (Bulgaria, Slovakia, Hungary, Poland, Czech Republic and Romania) it is tried to show the link between the stock market development and economic growth in these countries from 1995 to 2012 in order to explain the transition processes, from communist to market economies, which began with the fall of the Berlin Wall in 1989. The results show evidence of Granger causality between economic growth variables and financial market variables. |
| Keywords: | economic growth,stock market,financial markets,financial development |
| JEL: | F43 O16 G2 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ifwedp:201635&r=fdg |
| By: | d'Agostino, Giorgio; Scarlato, Margherita |
| Abstract: | This paper provides an empirical analysis of the linkages between the quality of government institutions and economic growth in the European context, highlighting innovation as the intermediate variable that drives this interplay. We use a standard non-scale R&D-based growth model as a theoretical framework and estimate the balanced growth path of per capita GDP for a sample of European countries and the transitional dynamic after a technological shock. Empirical analysis confirms the importance of technology as an instrument for increasing economic growth and suggests that inclusive institutions strongly affect this impact across the European countries. The magnitude of the effect is high: inclusive institutions redouble the effect of a technological shock on the growth rate of per capita GDP. This result suggests that innovation policies should carefully take into account the institutional setting of the contexts in which they are implemented in order to be effective. |
| Keywords: | Innovation, Economic growth, Institutions |
| JEL: | O30 O41 O43 |
| Date: | 2016–07–09 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:72427&r=fdg |
| By: | Peter L. Rousseau (Vanderbilt University); Paul Wachtel (Leonard N. Stern School of Business, New York University) |
| Abstract: | One strand of the economics literature addresses financial deepening as a precursor to economic growth. Another views it as a cause of financial crises. We examine historical data for 17 economies from 1870 to 1929 to distinguish episodes of growth induced by financial deepening from crises induced by credit booms. Cross-country panel regressions with five-year averages indicate that deepening episodes, defined as increases of more than thirty percent (and alternatively more than twenty percentage points) in the ratio of M2 to GDP over a ten year period, significantly enhanced the standard finance-growth dynamic, while deepening associated with financial crises sharply hindered it. We then describe some specific episodes of financial deepening in our sample. |
| Keywords: | finance-growth nexus, Atlantic economies, financial deepening, financial crisis |
| JEL: | E4 N1 |
| Date: | 2016–07–07 |
| URL: | http://d.repec.org/n?u=RePEc:van:wpaper:vuecon-sub-16-00013&r=fdg |
| By: | Muhammad Ali (Friedrich Schiller University Jena, Faculty of Economics and Business Administration); Abiodun Egbetokun (National Centre for Technology Management Federal Ministry of Science and Technology, Nigeria, and Tshwane University of Technology, Pretoria South Africa); Manzoor Hussain Memon (Social Policy and Development Centre (SPDC), Karachi, Pakistan, and Applied Economics Research Centre, University of Karachi, Pakistan) |
| Abstract: | In this paper we show that inconclusive results in previous empirical studies on human capital and growth might be due to omitted variable bias. Using data for about 130 countries, we show that after inclusion of variables related to the social capabilities concept of Abramovitz (1986) i.e. economic opportunities and quality of legal institutions, the human capital variable turns out to be significant. We also show that economic opportunities significantly moderate the relationship between human capital and growth. The results are robust to different variants of indices for economic opportunities and the quality of legal system. |
| Keywords: | Human Capital, Economic Growth, Economic Opportunities, Social Capabilities |
| JEL: | O15 O4 |
| Date: | 2016–07–06 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2016-013&r=fdg |
| By: | Gilbert COLLETAZ; Grégory LEVIEUGE; Alexandra POPESCU |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:leo:wpaper:2409&r=fdg |