Non-linear finance-growth nexus: A threshold with instrumental variable approach

Economics of Transition

Volumn 17, Issue 3, 2009, Pages 439-466

  Huang, Ho Chuan ^a   Lin, Shu Chin ^a  

^a TAMKANG UNIVERSITY   (Taiwan)

Author keywords

Economic growth; Financial development; Instrumental variable; Threshold regression

Indexed keywords

CAPITAL FLOW; ECONOMIC DEVELOPMENT; ECONOMIC GROWTH; FINANCIAL SYSTEM; PRODUCTIVITY; REGRESSION ANALYSIS;

EID: 67649136099     PISSN: 09670750     EISSN: 14680351     Source Type: Journal    
DOI: 10.1111/j.1468-0351.2009.00360.x     Document Type: Article

References (31)

1. Acemoglu, D. and Zilibotti, F. (1997). 'Was Prometheus unbound by change? Risk, diversification, and growth', Journal of Political Economy, 105, pp. 709-751.
2. Allen, F. and Gale, D. (1999). 'Financial markets, intermediaries, and intertemporal smoothing', Journal of Political Economy, 105, pp. 523-546.
3. Beck, T. and Levine, R. (2004). 'Stock markets, banks and growth: Panel evidence', Journal of Business & Finance, 28, pp. 423-442.
4. Beck, T., Levine, R. and Loayza, N. (2000). 'Finance and the sources of growth', Journal of Financial Economics, 58, pp. 261-300.
5. Blackburn, K., Bose, N. and Capasso, S. (2005). 'Financial development, financing choice and economic growth', Review of Development Economics, 9, pp. 135-149.
6. Boot, A. W. and Thakor, A. V. (1997). 'Financial system architecture', Review of Financial Studies, 10, pp. 693-733.
7. Bose, N. (2005). 'Endogenous growth and the emergence of equity finance', Journal of Development Economics, 77, pp. 173-188.
8. Boyd, J. H. and Smith, B. D. (1998). 'The evolution of debt and equity markets in economic development', Economic Theory, 12, pp. 519-560.
9. Calderon, C. and Liu, L. (2003). 'The direction of causality between financial development and economic growth', Journal of Development Economics, 72, pp. 321-334.
10. Caner, M. and Hansen, B. E. (2004). 'Instrumental variable estimation of a threshold model', Econometric Theory, 20, pp. 813-843.
11. Deidda, L., (2006). 'Interaction between economic and financial development', Journal of Monetary Economics, 53, pp. 233-248.
12. Deidda, L. and Fattouh, B. (2002). 'Non-linearity between finance and growth', Economics Letters, 74, pp. 339-345.
13. Deidda, L. and Fattouh, B. (2008). 'Banks, financial markets and growth', Journal of Financial Intermediation, 17, pp. 6-36.
14. Durlauf, S. N. and Johnson, P. A. (1995). 'Multiple regimes and cross-country growth behavior', Journal of Applied Econometrics, 10, pp. 365-384.
15. Greenwood, J. and Jovanovic, B. (1990). 'Financial development, growth, and the distribution of income', Journal of Political Economy, 98, pp. 1076-1107.
16. Hansen, B. E. (1996). 'Inference when a nuisance parameter is not identified under the null hypothesis', Econometrica, 64, pp. 413-430.
17. Hansen, B. E. (2000). 'Sample splitting and threshold estimation', Econometrica, 68, pp. 575-603.
18. Khan, A. (2001). 'Financial development and economic growth', Macroeconomic Dynamics, 5, pp. 413-433.
19. King, R. G. and Levine, R. (1993a). 'Finance and growth: Schumpeter might be right', Quarterly Journal of Economics, 108, pp. 717-738.
20. King, R. G. and Levine, R. (1993b). 'Finance, entrepreneurship, and growth: Theory and evidence', Journal of Monetary Economics, 32, pp. 513-542.
21. La Porta, R., Lopez-de-Silanes, F., Shleifer, A. and Vishny, R. W. (1997). 'Legal determinants of external finance', Journal of Finance, 52, pp. 1131-1150.
22. La Porta, R., Lopez-de-Silanes, F., Shleifer, A. and Vishny, R. W. (1998). 'Law and finance', Journal of Political Economy, 106, pp. 1113-1155.
23. Levine, R. (1998). 'The legal environment, banks, and long-run economic growth', Journal of Money, Credit and Banking, 30, pp. 596-613.
24. Levine, R. (1999). 'Law, finance, and economic growth', Journal of Financial Intermediation, 8, pp. 8-35.
25. Levine, R. and Zervos, S. (1998). 'Stock markets, banks, and economic growth', American Economic Review, 88, pp. 537-558.
26. Levine, R., Loayza, N. and Beck, T. (2000). 'Financial intermediation and growth: Causality and causes', Journal of Monetary Economics, 46, pp. 31-77.
27. Lucas, R. E. (1988). 'On the mechanics of economic development', Journal of Monetary Economics, 22, pp. 3-42.
28. McCaig, B. and Stengos, T. (2005). 'Financial intermediation and growth: Some robustness results', Economics Letters, 88, pp. 306-312.
29. Rioja, F. and Valev, N. (2004). 'Finance and the sources of growth at various stages of economic development', Economic Inquiry, 42, pp. 127-140.
30. Robinson, J. (1952). The Rate of Interest and Other Essays, London: Macmillan.
31. Wachtel, P. (2003). 'How much do we really know about growth and finance?' Federal Reserve Bank of Atlanta, Economic Review, 88, pp. 33-47.