GRM 2010 GRM 2011

Abstract Details

 
AUTHOR NAME
 
Family Name:
Majerbi
 
First Name:
Basma
 
ABSTRACT OF PAPER
 
Title of Paper:
Finance and Growth revisited: Towards a New Measure of Financial Development
 
Paper Proposal Text :
Abstract:
This paper revisits the link between finance and growth and proposes a new comprehensive measure of financial development that captures the overall structure of the financial sector and its degree of institutional diversification (ID). Based on data from 43 countries including developed and emerging markets, we document a significant link between this new measure and real GDP per capita growth. Countries with more diversified financial system structures tend to experience faster growth than countries with lower levels of institutional diversification. The ID measure remains statistically and economically significant across various model specifications and even after controlling for the standard financial development indicators, such as private credits by banks, whose significance for growth seems to be weakening over more recent time periods. These results have important implications for financial sector development policies, especially for emerging markets and the GCC/MENA regions.
 
 
 

WITH THE GENEROUS SUPPORT OF