Thresholds in the Finance-Growth Nexus : A Cross-Country Analysis

By Hakan Yilmazkuday. 2011

114 citations recorded by the source corpus.

Thresholds of inflation, government size, trade openness, and per capita income for the finance-growth nexus are investigated using five-year averages of standard variables for 84 countries from 1965 to 2004. The results suggest that: (i) high inflation crowds out positive effects of financial depth on long-run growth, (ii) small government sizes hurt the finance-growth nexus in low-income countries, while large government sizes hurt high-income countries, (iii) low levels of trade openness are sufficient for finance-growth nexus in high-income countries, but low-income countries need higher levels of trade openness for similar magnitudes of the finance-growth nexus, and (iv) catch-up effects through the finance-growth nexus are higher for moderate per capita income levels.

Subfields: Finance, Information Systems

View Paper: https://www.semanticscholar.org/paper/ada728850efb874934b76391bef937f87ff725d0

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Citations in the corpus

Determinants of the link between financial and economic development: Evidence from a functional coefficient model (2014, methodology): “This is in accordance with findings in Yilmazkuday (2011).”
Financial development and economic growth in Nigeria: Evidence from threshold modelling (2015, background): “2 Although there are a number of incisive studies which focus explicitly on a threshold perspective to the finance–growth nexus (see for instance, Rousseau and Wachtel, 2002, Rousseau and Yilmazkuday, 2009 and Yilmazkuday, 2011 among others), none of these have focused on Nigeria.”
Does the stock market cause economic growth? Portuguese evidence of economic regime change (2013, background): “…government size, per capita income, trade openness, and stock market indicators such as size, activity and efficiency are common in the literature (e.g. Bangake and Eggoh, 2011; Beck and Levine, 2002; Bordo and Rousseau, 2012; Huang et al., 2010; Naceur and Ghazouani, 2007; Yilmazkuday, 2011).”
How do financial globalization, institutions and economic growth impact financial sector development in European countries? (2020, background): “The negative sign of trade openness variable reveals that more open economies suffer from macroeconomic instability (Rodrik, 1992) and increase vulnerability to international shocks (Yilmazkuday, 2011).”