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Financial systems and economic growth: empirical evidence from Australia

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  • Nyasha, Sheilla
  • Odhiambo, Nicholas M.

Abstract

This paper has examined the dynamic impact of both bank- and market-based financialdevelopment on economic growth in Australia ? during the period 1980 to 2012. The studyuses the autoregressive distributed lag bounds (ARDL) testing approach to examine thislinkage. Unlike some previous studies, this study uses financial sector development indices tomeasure both bank- and market-based financial development. These indices were computedusing the method of means-removed average. The empirical results of this study show that whilebank-based financial development has a short-run positive impact on economic growth in Australia,market-based financial development has no significant impact on economic growth, both in the shortrun or in the long run.

Suggested Citation

  • Nyasha, Sheilla & Odhiambo, Nicholas M., 2015. "Financial systems and economic growth: empirical evidence from Australia," Working Papers 18927, University of South Africa, Department of Economics.
    • Handle: RePEc:uza:wpaper:18927
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    Cited by:

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    5. Akinola Ezekiel Morakinyo & Mabutho Sibanda, 2016. "Non-Performing Loans and Economic Growth in Nigeria: A Dynamic Analysis," SPOUDAI Journal of Economics and Business, SPOUDAI Journal of Economics and Business, University of Piraeus, vol. 66(4), pages 61-81, October-D.
    6. Omar Alaeddin & Moutaz Abojeib & Wajahat Azmi & Mhd Osama Alchaar & Kinan Salim, 2019. "The Effectiveness of the Bank Lending Channel: The Role of Banks' Market Power and Business Model," Contemporary Economics, University of Economics and Human Sciences in Warsaw., vol. 13(3), September.
    7. Fernando Zanella & Peter Oyelere & David McMillan, 2021. "Is financial development crucial for all economies?," Cogent Economics & Finance, Taylor & Francis Journals, vol. 9(1), pages 1923883-192, January.
    8. Anwar, Amar & Iwasaki, Ichiro, 2022. "The Finance–Growth Nexus inAsia : A Meta-Analytic Approach," CEI Working Paper Series 2022-03, Center for Economic Institutions, Institute of Economic Research, Hitotsubashi University.

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    Keywords

    Australia; Bank-Based Financial Development; Market-Based Financial Development; Economic Growth;
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