nep-fdg New Economics Papers
on Financial Development and Growth
Issue of 2017‒08‒13
six papers chosen by
Georg Man

  1. The Impact of Sectorial FDI on Economic Growth in Central, Eastern and Southeastern Europe By Mite Miteski; Dijana Janevska Stefanova
  2. Finansal Dışa Açıklık İle Ekonomik Büyüme İlişkisi: Asimetrik Nedensellik Testi By Yıldırım, Durmuş Çağrı; Çevik, Emrah İsmail
  3. Credit Market Quality, Innovation and Trade By Cristina Terra; Enrico Vasconcelos
  4. Financial Resource Curse in Resource-Rich Countries By Montfort Mlachila; Rasmané Ouedraogo
  5. Republic of Madagascar; Economic Development Document By International Monetary Fund
  6. Uganda; 2017 Article IV Consultation and Eighth Review Under the Policy Support Instrument-Press Release; Staff Report; and Statement by the Executive Director for Uganda By International Monetary Fund

  1. By: Mite Miteski (National Bank of the Republic of Macedonia); Dijana Janevska Stefanova (National Bank of the Republic of Macedonia)
    Abstract: This paper investigates the effects of foreign direct investment inflows in the industrial, construction and services sectors on economic growth in a panel of sixteen Central, Eastern and Southeastern European CESEE countries using data of different time spans within the 1998-2013 period. The empirical results show that total FDI contributes positively to the growth in the analyzed countries. With regards to our main focus, the analysis of the decomposition of FDI finds that FDI in the industrial and services sectors has a positive and significant effect on economic growth, whereas FDI in the construction sector does not exert statistically significant growth-promoting effects.
    Keywords: Foreign direct investment, economic growth, industrial sector, construction sector, services sector:
    JEL: F21 F43 C23 O47
    Date: 2017
  2. By: Yıldırım, Durmuş Çağrı; Çevik, Emrah İsmail
    Abstract: The aim of the study is to examine the effects of financial openness on Turkey economy for the periods of 1993-2016. We consider real GDP for economic growth variable in the study and financial openness variable is calculated regarding to definition by Aizenman (2004). We employ both Granger causality test and asymmetric causality test proposed by Hatemi-J (2012) to determine dynamic relation between economic growth and financial openness. We find bidirectional causal link running from economic growth to financial openness according to symmetric causality test result. Asymmetric causality test results suggest that financial openness is positively affected from economic contraction and economic growth effects financial openness as negatively.
    Keywords: Financial openness, GDP, asymmetric causality
    JEL: C32 E44
    Date: 2017–03
  3. By: Cristina Terra; Enrico Vasconcelos
    Abstract: Using a general equilibrium model with private R&D financing, we investigate the impact of trade openness on innovation, trade pattern and welfare for two countries equal in all aspects, except for the quality of credit markets. We show that trade openness increases innovation only in the country with better credit market, while it has a negative impact on innovation when credit markets are less developed. With respect to trade pattern, the country with worse credit market imports high tech goods and exports traditional goods. In terms of welfare, opening to trade may lower the welfare of individuals in the short run, but in the long run all of them are better o under free trade than if they were under autarky
    Date: 2017–07
  4. By: Montfort Mlachila; Rasmané Ouedraogo
    Abstract: Why do commodity-dependent developing countries have typically lower levels of financial development than their peers? The literature has proposed many possible explanations, but it typically does not dwell on the deep mechanisms that drive such an outcome. In this paper, we argue that the main cause is the shocks in commodity prices. We test the hypothesis on 68 commodity-rich developing countries between 1980 and 2014, and we find strong evidence of the financial development resource curse through the channel of commodity price shocks, after controlling for other explanations found in the literature. The findings are robust to the different types of commodities, the nature of the shocks, and various indicators of financial development. We also show how the impact of these shocks can be mitigated through good quality of governance.
    Keywords: Commodity price shocks;financial sector development, General, Financial Markets and the Macroeconomy, Government Policy and Regulation
    Date: 2017–07–19
  5. By: International Monetary Fund
    Abstract: The Economic Development Paper (DDE) describes the strategy adopted by the government to reverse the trend of modest economic performance, deteriorating social conditions, and persistent poverty observed in recent years. The strategy addresses the underlying causes of poverty mentioned above: modest economic performance over the past several decades, inadequately inclusive economic growth, the predominance of the subsistence economy at the expense of the money economy, reflecting the isolation of production areas; land tenure problems and deterioration of hydro-agricultural infrastructure; economic dualism, a cause of economic disjunction; persistent inflation and the erosion of purchasing power; limited coverage of the social protection system; an inefficient financial system that limits access to financing; persistent governance problems; underdeveloped sanitation infrastructure; the adverse impacts of climate change; and repeated political crises. The strategy adopts an approach that combines macroeconomic, sectoral, and structural elements that produce positive, direct impacts for poverty reduction.
    Keywords: Sub-Saharan Africa;Madagascar;
    Date: 2017–07–18
  6. By: International Monetary Fund
    Abstract: Economic growth has slowed. Secular and cyclical factors are at work. Private investment has plateaued in recent years and is skewed toward real estate. Credit to the private sector has stalled, driven by rising non-performing loans that partly reflect government arrears. Uganda has been affected by the drought in the Horn of Africa and regional conflicts.
    Keywords: Uganda;Sub-Saharan Africa;
    Date: 2017–07–12

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