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Financial developments and the rate of growth of output: An alternative approach

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  • Rao, B. Bhaskara
  • Tamazian, Artur
  • Singh, Rup
  • Vadlamannati, Krishna Chaitanya

Abstract

This paper uses a new specification and approach to estimate the effects of financial developments on the steady state rate of growth of output in India, Malaysia, Korea, Thailand and the Philippines for the period 1970 to 2006. These growth effects, though small, are found to be significant except for the Philippines. The trend rate of growth of total factor productivity (TFP), which is due to the omitted but trended variables, is the highest for Malaysia and moderate for India and Thailand. However, TFP is insignificant or negative in the Philippines and Korea.

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  • Rao, B. Bhaskara & Tamazian, Artur & Singh, Rup & Vadlamannati, Krishna Chaitanya, 2008. "Financial developments and the rate of growth of output: An alternative approach," MPRA Paper 8605, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:8605
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    Cited by:

    1. Rao, B. Bhaskara & Vadlamannati, Krishna Chaitanya, 2011. "Globalization and growth in the low income African countries with the extreme bounds analysis," Economic Modelling, Elsevier, vol. 28(3), pages 795-805, May.
    2. Tiru K Jayaraman & Keshmeer Kanewar Makun, 2020. "Tourism–growth nexus in Pacific Island Countries: A panel study on information and communication technology as a contingent factor," Tourism Economics, , vol. 26(3), pages 371-388, May.
    3. T. K. Jayaraman & Keshmeer Makun, 2019. "Digitisation as a Contingent Factor in India’s Financial Sector Development-growth Nexus: An Empirical Study," Margin: The Journal of Applied Economic Research, National Council of Applied Economic Research, vol. 13(3), pages 306-326, August.
    4. Joshua Adewale T. Ojo & Folasade Bosede Adegboye & Felicia Omowunmi Olokoyo, 2017. "The Disappointing Performance of Foreign Direct Investment in Industrial Development in Sub-Saharan African Countries," International Journal of Economics and Financial Issues, Econjournals, vol. 7(2), pages 677-681.
    5. Hong Chen & Tiru Jayaraman, 2016. "Role of Financial Sector in the Remittances-Growth Nexus in Fiji," Remittances Review, Remittances Review, vol. 1(1), pages 17-36, October.
    6. Rao, B. Bhaskara & Cooray, Arusha, 2010. "Determinants of the long-run growth rate in the South-Asian countries," MPRA Paper 26493, University Library of Munich, Germany.
    7. Folasade Bosede Adegboye & Olumide Sunday Adesina & Felicia Omowunmi Olokoyo & Stephen Aanu Ojeka & Victoria Abosede Akinjare, 2021. "The Impact of Trade Openness and Foreign Direct Investment on Economic Welfare in sub-Saharan Africa," International Journal of Financial Research, International Journal of Financial Research, Sciedu Press, vol. 12(2), pages 389-400, April.
    8. Kumar, Ronald R., 2010. "Impact of trade openness, remittances, capital inflows & financial development on income in Vanuatu," MPRA Paper 33221, University Library of Munich, Germany.
    9. Jayaraman, T. K. & Choong, Chee-Keong & Kumar, Ronald, 2011. "Role of Remittances in Economic Development: An Empirical Study of World’s Two Most Remittances Dependent Pacific Island Economies," MPRA Paper 33197, University Library of Munich, Germany.

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    More about this item

    Keywords

    Growth Rates. Financial developments; Solow Model; Country Specific Steady State;
    All these keywords.

    JEL classification:

    • N01 - Economic History - - General - - - Development of the Discipline: Historiographical; Sources and Methods
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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