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.

Causal Relationship Between Financial Sector Development in SMEs & Economic Growth in Southern Africa Region

Abstract: This study explores causal relationship between financial sector development in SMEs and economic growth in Zimbabwe using annual time series and the Error Correction Model (ECM) framework. Monetary sector improvement and financial development stayed a controversial issue in Southern African nations. Market analysts have distinctive hypothetical and exact perspectives on the causal connection between monetary sector improvement and financial development. support supply driving speculation that monetary sector improvement prompts financial development & credit to request pulling speculation which proposes that monetary improvement results from financial development. Study made use of Unit Root Tests, Cointegration, ECM and Granger Causality Tests. Empirical findings revealed a bidirectional relationship between financial sector development in SMEs, economic & business growth. Business & Economic Growth enhance a strong and flexible legal system allowing banks to allocate resources (credit) more efficiently to SMEs. Credit should be accessed by all enterprise fairly to encourage the development of indigenous businesses through SMEs.

Institutional governance and financial sector development: Panel evidence from Asian economies

Abstract: Current study aims to investigate the impact of institutional governance (GOV), trade openness (TOPEN), real output (RGDP), economic freedom (EFR), inflation rate (INFR) and real output growth on f...

Disasters and Development: Natural Disasters, Credit Constraints and Economic Growth

Abstract: Using a simple two-period model of the economy, we demonstrate the potential effects of natural disasters on economic growth over the medium to long-term. In particular, we focus on the effect of such shocks on investment. We examine two polar cases; an economy in which agents have unconstrained access to capital markets, versus a credit-constrained version, where the economy is assumed to operate in financial autarky. Considering these extreme cases allows us to highlight the interaction of disasters and economic underdevelopment, manifested through poorly developed financial markets. The predictions of our theoretical model are tested using panel data on natural disaster events at the country-year level, for the period 1979-2007. We find that for countries with low levels of financial sector development, natural disasters have persistent negative effects on economic growth over the medium-term. The results are robust to various checks.

Financial Integration and Risk-Adjusted Growth Opportunities

Abstract: This paper documents the evolution of measures of financial integration for major advanced and emerging markets economies, assesses whether advances in integration have had a significant positive impact on countries' risk-adjusted growth opportunities, and identifies some of the channels through which financial integration may foster growth. Three main results obtain. First, financial integration has progressed significantly worldwide, particularly in emerging markets, and regional integration has advanced at the fastest pace in Europe. Second, a country's speed of integration predicts future country's risk-adjusted growth opportunities, while improved risk-adjusted growth opportunities predict future advances in integration, indicating that the countries whose integration has been faster may have benefited most from a virtuous dynamics in which financial integration and improved real prospects are mutually reinforcing. Third, financial integration predicts globalization but the reverse does not necessarily hold, while advances in financial integration predict advances in financial development and improvements in the liquidity of equity markets.

An empirical investigation of the financial development - economic growth nexus: the case of Zimbabwe (1990 – 2008)

Abstract: Publisher's PDF version taken from http://jupapadoc.startlogic.com/compresearch/papers/JCR12-1.pdf,The study examines the relationship between financial development and economic growth in Zimbabwe for the period 1990-2008. The method of principal components is employed to construct a financial sector development index (FSDI) used to proxy development in the sector. Using the autoregressive distributed lag (ARDL) approach, the study finds a unique cointegrating relationship among real GDP, financial development, investment and real deposit rate. The results suggest that financial development exerts a positive and statistically significant effect on economic growth and investment is an important channel through which financial development feeds economic growth.