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Truths and Myths About the Finance-Growth Nexus in China: A Meta-Analysis

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  • Fei Guo
  • Shi He
  • Zhitao Lin

Abstract

Drawing on a unique dataset of 520 estimates from 32 studies, we analyze the effect of financial development on economic growth in China quantitatively using a meta-regression analysis. We find that the effect of financial development on economic growth, corrected for publication biases, is positive and statistically significant and that banking-sector development plays a dominant role in the economic growth of China. Moreover, there is weak evidence of the existence of Type-I publication bias and strong evidence of the existence of Type-II publication bias. We also find that sample size, the language of the studies, the empirical model, and the use of data from different regions are the sources of the heterogeneity of the estimates.

Suggested Citation

  • Fei Guo & Shi He & Zhitao Lin, 2023. "Truths and Myths About the Finance-Growth Nexus in China: A Meta-Analysis," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 59(5), pages 1408-1425, April.
    • Handle: RePEc:mes:emfitr:v:59:y:2023:i:5:p:1408-1425
    DOI: 10.1080/1540496X.2022.2136940
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