Does financial development cause economic growth? A panel data dynamic analysis for the Asian developing countries

Habibullah, Muzafar Shah and Eng, Yoke Kee (2006) Does financial development cause economic growth? A panel data dynamic analysis for the Asian developing countries. Journal of the Asia Pacific Economy, 11 (4). pp. 377-393. ISSN 1354-7860

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Official URL: http://dx.doi.org/10.1080/13547860600923585

Abstract

This paper examines the causal relationship between financial development and economic growth of the Asian developing countries from a panel data perspective and uses the system GMM technique developed by Arellano & Bover (1995) and Blundell & Bond (1998) and conducts causality testing analysis. The panel data sets involve 13 Asian developing countries: Bangladesh, India, Indonesia, South Korea, Lao PDR, Malaysia, Myanmar, Nepal, Pakistan, Philippine, Singapore, Sri Lanka and Thailand for the period 1990-1998. The result of our study is in agreement with other causality studies by Calderon & Liu (2003), Fase & Abma (2003), and Christopoulos & Tsionas (2004) that financial development promotes growth, thus supporting the old Schumpeterian hypothesis and Patrick's supply-leading' hypothesis.

Item Type:Article
Keyword:Asian countries, Demand-following, Finance-growth nexus, Supply-leading
Subject:Economic development - Asia
Subject:Finance - Asia
Subject:Developing countries - Economic conditions
Faculty or Institute:Faculty of Economics and Management
Publisher:Routledge
DOI Number:10.1080/13547860600923585
Altmetrics:http://www.altmetric.com/details.php?domain=psasir.upm.edu.my&doi=10.1080/13547860600923585
ID Code:18127
Deposited By: Azwana Abdul Rahman
Deposited On:05 Sep 2011 08:09
Last Modified:05 Sep 2011 08:09

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