Financial Development and Economic Growth: The Case of Eight Asian Countries

Macquarie Economics Working Paper No. 7/99

Posted: 23 Jun 2000

See all articles by Dipendra Sinha

Dipendra Sinha

Macquarie University, Australia; Ritsumeikan Asia Pacific University, Japan

Joseph Macri

Macquarie University - Department of Economics; Macquarie University, Macquarie Business School

Date Written: August 1999

Abstract

This paper looks at the relationship between financial development and economic development using time series data for eight Asian countries. First, we estimate augmented production functions where a financial development variable is added. Second, we conduct multivariate causality tests between the growth rate of income and the growth rates of the financial development variables. The regression results show a positive and significant relationships between the income variables and financial variables for India, Malaysia, Pakistan and Sri Lanka. The multivariate causality tests show that two-way causality between the income and the financial variables for India and Malaysia, one-way causality from financial variables to income variables for Japan and Thailand and the reverse causality for Korea, Pakistan and Philippines.

JEL Classification: C32, E51, O10

Suggested Citation

Sinha, Dipendra and Macri, Joseph, Financial Development and Economic Growth: The Case of Eight Asian Countries (August 1999). Macquarie Economics Working Paper No. 7/99. Available at SSRN: https://ssrn.com/abstract=228515

Dipendra Sinha (Contact Author)

Macquarie University, Australia ( email )

Department of Economics
Sydney NSW 2109
Australia
61-2-9850-9948 (Phone)
61-2-9850-8586 (Fax)

Ritsumeikan Asia Pacific University, Japan ( email )

Beppu
Oita
Japan
81-977-78-1214 (Phone)
81-977-78-1123 (Fax)

HOME PAGE: http://www.apu.ac.jp/~dsinha

Joseph Macri

Macquarie University - Department of Economics ( email )

Sydney NSW 2109
Australia
61-2-9850-9469 (Phone)
61-2-9850-8586 (Fax)

Macquarie University, Macquarie Business School ( email )

New South Wales 2109
Australia

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