Final published version, 541 KB, PDF document
Research output: Working paper
Research output: Working paper
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TY - UNPB
T1 - Financial Development, Economic Performance and Democracy
T2 - Methodological Issues and New Estimates
AU - Li, Zhenxiong
AU - Ingham, Hilary
PY - 2020/3/9
Y1 - 2020/3/9
N2 - This paper investigates the long-term effect of financial development on economic growth using annual data for 67 countries over the period 1971 to 2007.Both autoregressive distributed lag (ARDL) and cross-sectionally augmented autoregressive distributed lag (CS-ARDL) models are applied to count for crosscountry heterogeneity and error cross-country dependence. The results uphold a positive and significant effect of financial development on long-run per capita output. There is also some evidence of a non-linear relationship between financial development and growth. However, the analysis also reveals that the resultsderive primarily from non-democratic countries.
AB - This paper investigates the long-term effect of financial development on economic growth using annual data for 67 countries over the period 1971 to 2007.Both autoregressive distributed lag (ARDL) and cross-sectionally augmented autoregressive distributed lag (CS-ARDL) models are applied to count for crosscountry heterogeneity and error cross-country dependence. The results uphold a positive and significant effect of financial development on long-run per capita output. There is also some evidence of a non-linear relationship between financial development and growth. However, the analysis also reveals that the resultsderive primarily from non-democratic countries.
KW - Economic growth
KW - Financial development
KW - Democracy
M3 - Working paper
T3 - Economics Working Papers Series
BT - Financial Development, Economic Performance and Democracy
PB - Lancaster University, Department of Economics
CY - Lancaster
ER -