Financial development on growth convergence

Dong-Hyeon Kim, Ho Chuan Huang, Shu Chin Lin, Chih Chuan Yeh

Research output: Contribution to journalArticle

1 Citation (Scopus)

Abstract

This paper investigates whether the impacts of financial development on growth convergence vary with the stage of real development. We implement this analysis through the instrumental variable threshold regression approach proposed by Caner and Hansen. Our empirical evidence shows that financial intermediary development leads to long-run convergence in growth of both economic activity and productivity. Moreover, such convergence-enhancing effects of financial intermediation are stronger for less-developed countries than for the more industrialized. In addition, the data reveal that stock market development assists growth convergence only in low-income countries.

Original languageEnglish
Pages (from-to)493-514
Number of pages22
JournalScottish Journal of Political Economy
Volume57
Issue number4
DOIs
Publication statusPublished - 2010 Sep 1
Externally publishedYes

Fingerprint

stock market
low income
productivity
regression
Financial development
evidence
economics
Instrumental variables
Productivity
Less developed countries
Financial intermediation
Empirical evidence
Low-income countries
Financial intermediaries
Stock market development
Threshold regression
Economic activity

ASJC Scopus subject areas

  • Economics and Econometrics
  • Sociology and Political Science

Cite this

Financial development on growth convergence. / Kim, Dong-Hyeon; Huang, Ho Chuan; Lin, Shu Chin; Yeh, Chih Chuan.

In: Scottish Journal of Political Economy, Vol. 57, No. 4, 01.09.2010, p. 493-514.

Research output: Contribution to journalArticle

Kim, Dong-Hyeon ; Huang, Ho Chuan ; Lin, Shu Chin ; Yeh, Chih Chuan. / Financial development on growth convergence. In: Scottish Journal of Political Economy. 2010 ; Vol. 57, No. 4. pp. 493-514.
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