A nonparametric model of financial system and economic growth

Sagarika Mishra, Paresh Kumar Narayan

Research output: Contribution to journalArticleResearchpeer-review

26 Citations (Scopus)

Abstract

In this paper, we show that in the proposed models for economic growth, the financial system variables are generally nonparametric. We, thus, use a nonparametric panel data model to estimate the financial system-economic growth relationship. Our results suggest that as long as a country's domestic credit and private credit are above their cross-sectional mean they have a positive effect on GDP growth. We also discover that market capitalisation positively and significantly impacts GDP growth, while stocks traded (with the exception of OECD countries) has a statistically insignificant effect on GDP growth.

Original languageEnglish
Pages (from-to)175-191
Number of pages17
JournalInternational Review of Economics and Finance
Volume39
DOIs
Publication statusPublished - Sep 2015
Externally publishedYes

Keywords

  • Economic growth
  • Financial system
  • Nonparametric model

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