Institutional quality thresholds and the finance Growth nexus.

By S. Law, W. Azman-Saini, M. Ibrahim. 2013

274 citations recorded by the source corpus.

Using an innovative threshold estimation technique, this study examines whether the growth effect of financial development in countries with distinct levels of institutional development differs. The results demonstrate that there is a threshold effect in the finance-growth relationship. Specifically, we found that the impact of finance on growth is positive and significant only after a certain threshold level of institutional development has been attained. Until then, the effect of finance on growth is nonexistent. This finding suggests that the financial development-growth nexus is contingent on the level of institutional quality, thus supporting the idea that better finance (i.e., financial markets embedded within a sound institutional framework) is potent in delivering long-run economic development.

Subfields: Economics and Econometrics, Information Systems

View Paper: https://www.semanticscholar.org/paper/f0e056e8f65bc371b1ccb7d067537cb1424c081f

How researchers see this paper

The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.

In Economics and Econometrics

1. S. Law
2. Nirvikar Singh
3. Jagadish Prasad Bist
4. Muhammad Shahbaz
5. Boris Cournéde
6. Oliver Denk
7. José L. Ruiz

In Information Systems

1. Nirvikar Singh
2. S. Law
3. Jagadish Prasad Bist
4. W. Azman-Saini
5. M. Ibrahim
6. José L. Ruiz
7. Boris Cournéde
8. Oliver Denk

Citations in the corpus

• Does too much finance harm economic growth (2014, background): “…2008; Roe and Siegel, 2011; Huang, 2010), culture (Stulz and Williamson, 2003), trade and financial openness (Rajan and Zingales, 2003; Baltagi et al., 2009; Law, 2009), remittances (Aggarwal et al. 2011; Demirgüç-Kunt et al. 2011), institutions (Law and Azman-Saini, 2012; Law et al., 2013).”