Chicken or Egg: Financial Development and Economic Growth in China, 1992—2004

doi:10.16382/j.cnki.1000-5579.2006.02.016

Abstract

Abstract:

This paper contributes to the empirical finance-growth literature by examining the relationship between financial depth, banking sector development, stock market development and economic growth in China.We apply Granger (non-) causality tests and weakly exogeneity test for non-stationary variables to examine short-run and long-run causality between economic growth and financial development.We find positive relationships between financial depth, banking sector development and growth.And the influence of stock market development on GDP appear to be much stronger than that of the banking development in long-run.

Key words: Financial development, Economic growth, Granger (non-) causality tests, weakly exogeneity test

CLC Number:

Xue-jun FAN, Lensink Robert, Jacobs Jan. Chicken or Egg: Financial Development and Economic Growth in China, 1992—2004[J]. Journal of East China Normal University (Philosophy and Social Sciences), 2006, 38(2): 102-107.

Figures/Tables 7

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