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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.


Papers
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Journal ArticleDOI
TL;DR: In this paper, the authors provide a selective survey of the leading theoretical and empirical issues surrounding the flow of funds: its meaning and origin, problems of construction, and more particularly the key issues involved in financial modelling.
Abstract: This paper provides a selective survey of the leading theoretical and empirical issues surrounding the flow of funds: its meaning and origin, problems of construction, and more particularly the key issues involved in financial modelling. It is argued that there is an intimate connection between the flow of funds, interest rate and asset price determination, and hence incomes and expenditures in an economy. The paper also explores the reasons for lack of success at empirical flow of funds modelling and proposes “promising research ideas” (PRIs) for future research on the relationship between financial sector development and the real economy, especially in order to identify effective financial sector policies for promoting poverty-reducing economic growth in low-income developing countries.

40 citations

BookDOI
TL;DR: In this paper, a comprehensive literature review concerning the quantitative effects of financial development on economic growth and employment, and various determinants of financial sector development is presented, and the authors identify some missing avenues in the literature and provide a number of suggestions for future work.
Abstract: A likely image of the current state of the literature on financial sector development is that of a Swiss cheese with many holes inside important areas of knowledge. The aim of this synthesis paper is to map the current knowledge and ignorance (i.e., holes) in the literature by providing a narrative for the empirical findings of a comprehensive literature review concerning the quantitative effects of financial development on economic growth and employment, and various determinants of financial sector development. The literature was restricted mostly to high-quality academic research that focuses on developing countries over the period 1960-2012. Because of data constraints, this review also includes cross-country analyses, in which developed and developing countries are considered together. The main findings include (i) a positive relationship between financial development and economic growth and employment, subject to a number of qualifications; (ii) a complicated relationship of regulations and supervision to financial sector development; and (iii) a positive relationship between an enabling institutional environment and financial sector development. This review also identifies some missing avenues in the literature and provides a number of suggestions for future work.

40 citations

Journal ArticleDOI
TL;DR: In this article, the authors show that the behavior of entrepreneurs facing incomplete financial markets and risky investment can explain why growth accelerations in developing countries tend to be associated with current account improvements.
Abstract: This paper shows that the behavior of entrepreneurs facing incomplete financial markets and risky investment can explain why growth accelerations in developing countries tend to be associated with current account improvements. The uninsurable risk of losing invested capital forces entrepreneurs to rely on self-financing, so that when business opportunities open up entrepreneurs increase saving to finance the investment that produces growth. The key insight is that saving has to rise more than investment to allow also for the accumulation of precautionary assets. Plausibly calibrated simulations show that this net saving increase can sustain large and persistent net capital outflows.

40 citations

Journal ArticleDOI
TL;DR: This paper investigated the link between gender inequality in financial inclusion and income inequality, using a micro-dataset covering 146,000 individuals in over 140 countries, and derived the distribution of individual financial access scores across countries to document a Kuznets-curve.
Abstract: We investigate the link between gender inequality in financial inclusion and income inequality, with three contributions to the recent literature. First, using a micro-dataset covering 146,000 individuals in over 140 countries, we construct novel, synthetic indices of the intensity of financial inclusion at the individual and country level. Second, we derive the distribution of individual financial access “scores” across countries to document a “Kuznets”-curve in financial inclusion. Third, cross-country regressions confirm that our measure of inequality in financial access is significantly related to income inequality, above and beyond other factors previously highlighted in the literature.

40 citations

Journal ArticleDOI
TL;DR: In this paper, the authors examined the impact of two dimensions of the government, namely, size and quality, on the financial sector, including size and efficiency, in a cross-section of 71 economies.

40 citations


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Performance
Metrics
No. of papers in the topic in previous years
YearPapers
202357
202279
202155
202093
201991
201888