Financial sector development

About: Financial sector development is a research topic. Over the lifetime, 1674 publications have been published within this topic receiving 90787 citations.

The Role of Financial Sector Development in the Tourism- Growth Nexus: A Case of Southern African Countries

Abstract: The study explored the impact of financial development on the tourism -growth nexus in Southern African (SADC) countries using the three panel data analysis approaches (pooled OLS, fixed and random effects). Specifically, the study investigated whether financial development is a channel through tourism influences economic growth in SADC countries or if the complementarity between financial development and tourism has a significant positive impact on economic growth in the SADC region? Theoretical and empirical literature review shows that the positive separate impact of tourism and financial development on economic growth is no longer a disputed matter. What has so far not been conclusively studied is whether financial management is a channel through which tourism influences economic growth. It is against this backdrop that the author undertook the current study in order to make a contribution to literature. The study found out that tourism had a significant negative influence on economic growth whereas financial development positively and significantly affected economic growth in the SADC region. The complementarity between tourism and financial development had a positive (fixed effects) and significant positive influence (pooled OLS and random effects) on economic growth in SADC countries, in line with theoretical predictions. SADC countries are therefore urged to improve their financial sector development levels in order to enhance the impact of tourism on economic growth.

Growth-Financial Intermediation Nexus in China

Abstract: This paper studies the relationship between economic growth and financial development in China during the post-1978 reform period. Recent studies, based on cross-country data, have found a positive association between these two variables. We find that while a positive correlation between growth and financial intermediation exists in China, the association is more apparent than real. The nonstate sector, which contributed most to China's remarkable growth during this period, did not use the domestic financial system in any substantial way for financing. The same appears to be true for the faster-growing provinces. Compared to foreign investment, domestic private credit played a relatively small, although statistically significant, role in financing the nonstate sector and fast-growing provinces.

Experience and Perspectives of Financial Sector Development in Central and Eastern Europe

Abstract: It is a great honor and pleasure for me to be here today. Let me just inject some kind of aggressiveness and impoliteness into this discussion, because I think we need a more lively debate. Let me challenge the conference organizers by saying that for me at least the title of this conference is a little premature. It is too early to say that we are completing the transition, at least not in the financial sector.

Financial development and industrial capital accumulation

Abstract: There may be a compelling discontinuity to financial sector development in that banks need to be supported early in development but need to be weakened later - at the expense of bank rents - to foster further development The important question for policy is when and how to generate and manage this discontinuity so that it is not forced on society by costly and traumatic events such as bank failures In an economy where decisions are decentralized and made under conditions of uncertainty, the financial system can be seen as the complex of institutions, infrastructure, and instruments that society adopts to minimize the costs of trading promises when agents have incomplete trust and limited information Building on a microeconomic general equilibrium model that portrays such fundamental financial functions, Bossone shows that, in line with recent empirical evidence, the development of financial infrastructure stimulates greater and more efficient capital accumulation He also shows that economies with more developed financial infrastructure can more easily absorb exogenous shocks to output The results call for addressing a crucial issue in the sequencing of reform in the financial sector: early in development, banks provide essential financial infrastructure services as part of their exclusive relationships with borrowers Further economic development requires that such services be provided extrinsically to the bank-borrower relationship, clearly at the expense of bank rents There may be a compelling discontinuity to financial sector development in that banks need to be supported early in development but to be weakened later - at the expense of bank rents - to foster further development The important question for policy is when and how to generate and manage this discontinuity so that it is not forced on society by costly and traumatic events such as bank failures This paper - a product of the Financial Economics Unit, Financial Sector Practice Department - is part of a larger effort in the department to study the links between financial sector and economic development and improve financial sector reform policies

The role of non-bank financial intermediaries (with particular reference to Egypt)

Abstract: Non-bank financial intermediaries (NBFIs) comprise a mixed bag of institutions, ranging from leasing, factoring, and venture capital companies to various types of contractual savings and institutional investors (pension funds, insurance companies, and mutual funds). The common characteristic of these institutions is that they mobilize savings and facilitate the financing of different activities, but they do not accept deposits from the public. NBFIs play an important dual role in the financial system. They complement the role of commercial banks by filling gaps in their range of services. But they also compete with commercial banks and force them to be more efficient and responsive to the needs of their customers. Most NBFIs are also actively involved in the securities markets and in the mobilization and allocation of long-term financial resources. The state of development of NBFIs is usually a good indicator of the state of development of the financial system. The author focuses on contractual savings institutions, namely pension funds and life insurance companies, that are by far the most important NBFIs. He also offers a brief review of the role and growth of other NBFIs, such as leasing and factoring companies, as well as venture capital companies and mutual funds. The author covers developments in selected countries in different regions of the world. He also examines the recent growth of NBFIs, especially contractual savings institutions and securities markets, in Egypt. He discusses the necessary regulatory and other policy reforms for promoting NBFIs--in particular, the openness to international markets and foreign presence that is essential for the transfer of skills and technologies.