nep-fdg New Economics Papers
on Financial Development and Growth
Issue of 2017‒09‒10
three papers chosen by
Georg Man

  1. Financial Sector Development and Economic Growth in India: Some Reflections By Joshi, Seema
  3. At What Levels of Financial Development Does Information Sharing Matter? By Asongu, Simplice; Nwachukwu, Jacinta

  1. By: Joshi, Seema
    Abstract: Financial systems play a crucial role in the economic development of a country. There is sufficient economic literature which reveals that a well functioning financial system increases economic efficiency, investment and growth. This paper provides a snapshot of the evolution of Indian financial system along with its progress and performance by making use of various proxy variables of financial development. It also attempts to examine the the relationship between the financial development and growth in Indian context. By using time series data from1991-91 to2012-13 period and using three proxy variables viz.GDP per capita for economic growth of India, M2 to GDP ratio and ratio of stock market capitalization to GDP for measuring the extent of financial deepening in India and utilizing regression technique, the empirical findings very clearly point towards the existence of strong relationship between financial deepening(FD) and EG. The paper also shows the extent of financial deepening of markets in India vis-a vis other Asia Pacific economies. The analysis reveals that the Indian financial sector has undergone far reaching changes over three and half decades as a result of financial sector reforms. Consequently, the widening and deepening of financial system has allowed greater and more productive investment to occur. Financial intermediation has increased over time, which in turn is leading to a virtuous cycle of higher savings, improved investment efficiency and higher real economic growth. However, there are several challenges in the financial sector in the form of increasing non-performing assets (or bad loans) of the banks and underdeveloped corporate bond market. These challenges need attention and require policy intervention.
    Keywords: G00,G1, G2
    JEL: G1 G2
    Date: 2016–12
  2. By: Safaa Tabit (Université Mohammed 5 Agdal); Charaf-Eddine Moussir (Université Mohammed 5 Agdal)
    Abstract: This paper aims to analyze the impact of MRA's remittances on economic growth by using two models VAR and ECM over the period 1975-2014. The results conclude that MRA's remittances represent a determinant of economic growth, in the short term, with an elasticity low compared to the long-term behavior. Given the impulse responses analysis, a shock on MRA's transfers has a positive impact on GDP, investment and consumption.
    Keywords: Economic growth,Remittances,VAR,Error correction model,Moroccans resident abroad
    Date: 2017
  3. By: Asongu, Simplice; Nwachukwu, Jacinta
    Abstract: The purpose of this study is to investigate how increasing information sharing bureaus affect financial access. For this reason, we have employed contemporary and non-contemporary interactive Quantile Regressions in 53 African countries for the period 2004-2011. Information sharing bureaus are proxied with public credit registries and private credit offices. Financial development dynamics involving depth (at overall economic and financial system levels), efficiency (at banking and financial system levels), activity (from banking and financial system perspectives) and size are used. Two key findings are established. First, the effect of increasing private credit bureaus is not clearly noticeable on financial access, probably because private credit agencies are still to be established in many countries. Second, increasing public credit registries improves financial allocation efficiency and activity (or credit) between the 25th and 75th quartiles for the most part. As a main policy implication, countries in the top (or highest levels of financial development) and bottom (or lowest levels of financial development) ends of the financial efficiency and activity distributions are unlikely to benefit from enhanced financial allocation efficiency owing to increasing public credit registries.
    Keywords: Information Sharing; Financial Development; Quantile Regression
    JEL: C52 G20 G29 O16 O55
    Date: 2017–01

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