The role of institutions in finance curse: evidence from international data
This paper investigates the effect of banking sector development on economic growth in a panel of 87 countries, paying particular attention to the role of institutions in reducing the finance curse phenomenon. The dynamic generalized method-of-moments (GMM) results indicate that institutions play an...
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| Format: | Article |
| Language: | English |
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Elsevier
2018
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| Online Access: | http://psasir.upm.edu.my/id/eprint/14169/ http://psasir.upm.edu.my/id/eprint/14169/1/The%20role%20of%20institutions%20in%20finance%20curse%20evidence%20from%20international%20data.pdf |
| _version_ | 1848842318821457920 |
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| author | Law, Siong Hook Kutan, Ali M. Niaz Ahmad, Mohd Naseem |
| author_facet | Law, Siong Hook Kutan, Ali M. Niaz Ahmad, Mohd Naseem |
| author_sort | Law, Siong Hook |
| building | UPM Institutional Repository |
| collection | Online Access |
| description | This paper investigates the effect of banking sector development on economic growth in a panel of 87 countries, paying particular attention to the role of institutions in reducing the finance curse phenomenon. The dynamic generalized method-of-moments (GMM) results indicate that institutions play an important role in mediating the positive relationship between banking sector development and growth. This suggests that the marginal impact of financial development on growth depends on institutional quality. Using the four-way partition of institutions classified by Rodrik (2005), we also find that resilient market-regulating, market-stabilizing, and market-creating institutions act as mediators to the financial market in facilitating growth. The results are robust to using alternative institutions indicators, estimation strategies, and stopping the sample before the 2007-2008 global financial crisis. |
| first_indexed | 2025-11-15T07:57:14Z |
| format | Article |
| id | upm-14169 |
| institution | Universiti Putra Malaysia |
| institution_category | Local University |
| language | English |
| last_indexed | 2025-11-15T07:57:14Z |
| publishDate | 2018 |
| publisher | Elsevier |
| recordtype | eprints |
| repository_type | Digital Repository |
| spelling | upm-141692018-10-05T07:45:16Z http://psasir.upm.edu.my/id/eprint/14169/ The role of institutions in finance curse: evidence from international data Law, Siong Hook Kutan, Ali M. Niaz Ahmad, Mohd Naseem This paper investigates the effect of banking sector development on economic growth in a panel of 87 countries, paying particular attention to the role of institutions in reducing the finance curse phenomenon. The dynamic generalized method-of-moments (GMM) results indicate that institutions play an important role in mediating the positive relationship between banking sector development and growth. This suggests that the marginal impact of financial development on growth depends on institutional quality. Using the four-way partition of institutions classified by Rodrik (2005), we also find that resilient market-regulating, market-stabilizing, and market-creating institutions act as mediators to the financial market in facilitating growth. The results are robust to using alternative institutions indicators, estimation strategies, and stopping the sample before the 2007-2008 global financial crisis. Elsevier 2018 Article PeerReviewed text en http://psasir.upm.edu.my/id/eprint/14169/1/The%20role%20of%20institutions%20in%20finance%20curse%20evidence%20from%20international%20data.pdf Law, Siong Hook and Kutan, Ali M. and Niaz Ahmad, Mohd Naseem (2018) The role of institutions in finance curse: evidence from international data. Journal of Comparative Economics, 46 (1). pp. 174-191. ISSN 0147-5967; ESSN: 1095-7227 https://www.sciencedirect.com/science/article/pii/S014759671730029X#! 10.1016/j.jce.2017.04.001 |
| spellingShingle | Law, Siong Hook Kutan, Ali M. Niaz Ahmad, Mohd Naseem The role of institutions in finance curse: evidence from international data |
| title | The role of institutions in finance curse: evidence from international data |
| title_full | The role of institutions in finance curse: evidence from international data |
| title_fullStr | The role of institutions in finance curse: evidence from international data |
| title_full_unstemmed | The role of institutions in finance curse: evidence from international data |
| title_short | The role of institutions in finance curse: evidence from international data |
| title_sort | role of institutions in finance curse: evidence from international data |
| url | http://psasir.upm.edu.my/id/eprint/14169/ http://psasir.upm.edu.my/id/eprint/14169/ http://psasir.upm.edu.my/id/eprint/14169/ http://psasir.upm.edu.my/id/eprint/14169/1/The%20role%20of%20institutions%20in%20finance%20curse%20evidence%20from%20international%20data.pdf |