Financial Development and Economic Growth: An Overview

By Mohsin S. Khan, Abdelhak S. Senhadji. Social Science Research Network, 2000

396 citations recorded by the source corpus.

In recent years there has been substantial theoretical and empirical work on the role that financial markets play in fostering economic growth and development. This paper provides a selective review of the literature, as well as new empirical evidence on the relationship between financial development and economic growth for a large cross-section sample of countries. While the results indicate that the effect of financial development on growth is positive, the size of the effect varies with different indicators of financial development, estimation method, data frequency, and the functional form of the relationship.

Subfields: Economics and Econometrics, Information Systems

View Paper: https://www.semanticscholar.org/paper/21d6f106c70f1e860a5f17aa94065bf6915a9b72

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Citations in the corpus

INFLATION AND FINANCIAL DEPTH (2001, methodology): “Finally, Khan and Senhadji (2000), in the most recent study of this subject, find that the effect of financial development on growth is positive, although the size of the effect varies with different measures of financial development, estimation method, data frequency, and the functional form of…”
Financial Development and Economic Growth: New Evidence From Panel Data (2007, neutral): “…two monetary aggregates (M2 or M1) may be poor proxy in economies with underdeveloped financial systems ecause they “are more related to the ability of the financial system o provide transaction services than to the ability to channel funds rom savers to borrowers” (Khan & Senhadji, 2000, p. ii93).”
Financial Development and Economic Growth: The Case of Pakistan (2005, background): “5See for example, Gelb (1989), King and Levine (1993, 1993a), Khan and Senhadji (2000) and Levine, et al. (2000).”
FINANCIAL DEVELOPMENT AND ECONOMIC GROWTH: TIME SERIES EVIDENCE FROM PAKISTAN AND CHINA (2008, background): “While the correlation between all growth indicators, mentioned by King and Levine (1993), GYP, growth rate of real per capita capital (GK), and growth rate of real investment (GRIN) are negative or of low positive values with some exception in both countries.”
Financial development and economic growth: evidence from panel unit root and cointegration tests (2004, background): “( 2000 ) , Levine ( 1999 ) and Khan and Senhadji ( 2000 ) who find positive effects of financial depth on growth .”
How Important are Foreign Banks in the Financial Development of European Transition Countries? (2004, background): “First, more developed countries generally have more developed financial markets (see Khan and Senhadji 2000).”
Foreign Direct Investment and Economic Growth: The Role of Domestic Financial Sector (2007, methodology): “King and Levine (1993, 1993a) and Beck, et al. (2000) suggest that financial systems are important for both productivity and development. Levine and Zervos (1998) show that development of all financial institutions exerted positive influence on economic growth. Rajan and Zingales (1998) found that f”
Financial Reforms and Interest Rate Spreads in the Commercial Banking System in Malawi (2004, background): “While there is no complete agreement on the McKinnon-Shaw paradigm that the removal of financial repression, usually characterized by control of interest rates, imposition of credit ceilings, and credit rationing, leads to significant amelioration of growth prospects, the dominant view is that finan”