Finance, institutions and economic development

Using data from 72 countries for the period 1978-2000, we find that financial development has larger effects on GDP per capita when the financial system is embedded within a sound institutional framework. Moreover, we find that financial development is most potent in middle-income countries, where i...

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Main Authors: Demetriades, Panicos, Law, Siong Hook
Format: Article
Language:English
English
Published: John Wiley & Sons, Ltd 2006
Subjects:
Online Access:http://psasir.upm.edu.my/id/eprint/18296/
http://psasir.upm.edu.my/id/eprint/18296/1/Finance.pdf
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author Demetriades, Panicos
Law, Siong Hook
author_facet Demetriades, Panicos
Law, Siong Hook
author_sort Demetriades, Panicos
building UPM Institutional Repository
collection Online Access
description Using data from 72 countries for the period 1978-2000, we find that financial development has larger effects on GDP per capita when the financial system is embedded within a sound institutional framework. Moreover, we find that financial development is most potent in middle-income countries, where its effects are particularly large when institutional quality is high. Importantly, we also find that in low-income countries the influence of financial development is at its weakest; in these countries, more finance without sound institutions may not succeed in delivering long-run economic benefits. Copyright © 2006 John Wiley & Sons, Ltd.
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spelling upm-182962015-11-12T07:45:51Z http://psasir.upm.edu.my/id/eprint/18296/ Finance, institutions and economic development Demetriades, Panicos Law, Siong Hook Using data from 72 countries for the period 1978-2000, we find that financial development has larger effects on GDP per capita when the financial system is embedded within a sound institutional framework. Moreover, we find that financial development is most potent in middle-income countries, where its effects are particularly large when institutional quality is high. Importantly, we also find that in low-income countries the influence of financial development is at its weakest; in these countries, more finance without sound institutions may not succeed in delivering long-run economic benefits. Copyright © 2006 John Wiley & Sons, Ltd. John Wiley & Sons, Ltd 2006-07 Article PeerReviewed application/pdf en http://psasir.upm.edu.my/id/eprint/18296/1/Finance.pdf Demetriades, Panicos and Law, Siong Hook (2006) Finance, institutions and economic development. International Journal of Finance and Economics, 11 (3). pp. 245-260. ISSN 1076-9307 http://dx.doi.org/10.1002/ijfe.296 Economic development Finance doi:10.1002/ijfe.296 English
spellingShingle Economic development
Finance
Demetriades, Panicos
Law, Siong Hook
Finance, institutions and economic development
title Finance, institutions and economic development
title_full Finance, institutions and economic development
title_fullStr Finance, institutions and economic development
title_full_unstemmed Finance, institutions and economic development
title_short Finance, institutions and economic development
title_sort finance, institutions and economic development
topic Economic development
Finance
url http://psasir.upm.edu.my/id/eprint/18296/
http://psasir.upm.edu.my/id/eprint/18296/
http://psasir.upm.edu.my/id/eprint/18296/
http://psasir.upm.edu.my/id/eprint/18296/1/Finance.pdf