Which Way to Go Now? Financing Economic Growth in the Sustainable Development Era
Our paper uses a novel methodology to reexamine the relationship between financial development and economic growth in the era of sustainable development. Our empirical procedure deals with both functional-form misspecification bias as well as bias from endogenous regressors. It also provides an esti...
| Main Authors: | , |
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| Format: | Article |
| Language: | English |
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World Scientific Publishing
2023-09-01
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| Series: | Asian Development Review |
| Subjects: | |
| Online Access: | https://www.worldscientific.com/doi/10.1142/S0116110523500142 |
| _version_ | 1797655849056862208 |
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| author | SUDIP RANJAN BASU MONICA DAS |
| author_facet | SUDIP RANJAN BASU MONICA DAS |
| author_sort | SUDIP RANJAN BASU |
| collection | DOAJ |
| description | Our paper uses a novel methodology to reexamine the relationship between financial development and economic growth in the era of sustainable development. Our empirical procedure deals with both functional-form misspecification bias as well as bias from endogenous regressors. It also provides an estimate of the growth-finance relationship for every country-year observation, allowing us to examine the relationship of interest for various country groups, using a global sample of 133 countries during 1960–2015. Our results indicate that countries with weak institutions and a smaller-than-average banking sector will reap more benefits from bank-based financial systems. The impact of financial development on economic performance has enormous policy implications for international institutions that provide policy support to countries in their pursuit of achieving the 2030 Agenda for Sustainable Development. |
| first_indexed | 2024-03-11T17:20:35Z |
| format | Article |
| id | doaj.art-78d9e0c19cff405eb5b19e6416ff97e6 |
| institution | Directory Open Access Journal |
| issn | 0116-1105 1996-7241 |
| language | English |
| last_indexed | 2024-03-11T17:20:35Z |
| publishDate | 2023-09-01 |
| publisher | World Scientific Publishing |
| record_format | Article |
| series | Asian Development Review |
| spelling | doaj.art-78d9e0c19cff405eb5b19e6416ff97e62023-10-19T12:43:52ZengWorld Scientific PublishingAsian Development Review0116-11051996-72412023-09-01400217720910.1142/S0116110523500142Which Way to Go Now? Financing Economic Growth in the Sustainable Development EraSUDIP RANJAN BASU0MONICA DAS1United Nations Economic and Social Commission for Asia and the Pacific (Pacific Office), United Nations, Suva, FijiSkidmore College, United StatesOur paper uses a novel methodology to reexamine the relationship between financial development and economic growth in the era of sustainable development. Our empirical procedure deals with both functional-form misspecification bias as well as bias from endogenous regressors. It also provides an estimate of the growth-finance relationship for every country-year observation, allowing us to examine the relationship of interest for various country groups, using a global sample of 133 countries during 1960–2015. Our results indicate that countries with weak institutions and a smaller-than-average banking sector will reap more benefits from bank-based financial systems. The impact of financial development on economic performance has enormous policy implications for international institutions that provide policy support to countries in their pursuit of achieving the 2030 Agenda for Sustainable Development.https://www.worldscientific.com/doi/10.1142/S0116110523500142economic growthfinancial developmentnonlinearitiesnonparametric methods |
| spellingShingle | SUDIP RANJAN BASU MONICA DAS Which Way to Go Now? Financing Economic Growth in the Sustainable Development Era Asian Development Review economic growth financial development nonlinearities nonparametric methods |
| title | Which Way to Go Now? Financing Economic Growth in the Sustainable Development Era |
| title_full | Which Way to Go Now? Financing Economic Growth in the Sustainable Development Era |
| title_fullStr | Which Way to Go Now? Financing Economic Growth in the Sustainable Development Era |
| title_full_unstemmed | Which Way to Go Now? Financing Economic Growth in the Sustainable Development Era |
| title_short | Which Way to Go Now? Financing Economic Growth in the Sustainable Development Era |
| title_sort | which way to go now financing economic growth in the sustainable development era |
| topic | economic growth financial development nonlinearities nonparametric methods |
| url | https://www.worldscientific.com/doi/10.1142/S0116110523500142 |
| work_keys_str_mv | AT sudipranjanbasu whichwaytogonowfinancingeconomicgrowthinthesustainabledevelopmentera AT monicadas whichwaytogonowfinancingeconomicgrowthinthesustainabledevelopmentera |