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The role of the financial sector in enhancing economic growth in the Lao People’s Democratic Republic

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  • Kristina Spantig

    (PhD, University of Leipzig, Institute for Economic Policy, Grimnasche Spafbe 12, 04109 Leipeig, Germany)

Abstract

The financial sector of the Lao People’s Democratic Republic has been developing rapidly in recent years in terms of financial depth, intermediation and distribution. A developed financial sector is the basis for dynamic economic growth. Yet, unsustainable financial liberalization and growth poses risks to financial sector stability. The present report scrutinizes the role of the financial sector in enhancing economic growth in the Lao People’s Democratic Republic and aims to answer the question of adequate financial sector supervision with respect to the economy’s development. It is argued that only a prudentially supervised financial sector can enhance the economic growth performance of the country in the medium and long term.

Suggested Citation

  • Kristina Spantig, 2015. "The role of the financial sector in enhancing economic growth in the Lao People’s Democratic Republic," Asia-Pacific Development Journal, United Nations Economic and Social Commission for Asia and the Pacific (ESCAP), vol. 22(1), pages 67-98, June.
    • Handle: RePEc:unt:jnapdj:v:22:y:2015:i:1:p:67-98
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    More about this item

    Keywords

    Finance-growth nexus; financial sector development; supervision.;
    All these keywords.

    JEL classification:

    • G01 - Financial Economics - - General - - - Financial Crises
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • O49 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Other

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