Finance and Growth: Schumpeter Might Be Wrong in Our Era. New Evidence from Meta-Analysis

African Governance and Development Institute WP/13/009

26 Pages Posted: 9 Sep 2014

See all articles by Simplice Asongu

Simplice Asongu

African Governance and Development Institute

Date Written: January 8, 2013

Abstract

Purpose – In a meta-study on the finance-growth nexus, we have bridged the gap between Schumpeterian authors and sympathizers of a questionable finance-growth nexus.

Design/methodology/approach – Over 20 fundamental characteristics that have influenced the debate over the last decades have been examined. The empirical evidence is based on 196 outcomes from 20 studies. We assess the degree of heterogeneity and identify causes of the observed differentiation.

Findings – Our findings also show evidence of publication bias. Overall, a genuine effect exists between financial development and economic growth. Schumpeter’s thesis might be wrong in our era because of: endogeneity-based estimations, publication bias and, effects of financial activity. A historical justification has also been discussed.

Originality/value – Very few meta-analysis studies have focused on the finance-growth nexus.

Keywords: Meta analysis; Finance; Economic growth; Publication bias

JEL Classification: C1; C4; E0; O0

Suggested Citation

Asongu, Simplice, Finance and Growth: Schumpeter Might Be Wrong in Our Era. New Evidence from Meta-Analysis (January 8, 2013). African Governance and Development Institute WP/13/009. Available at SSRN: https://ssrn.com/abstract=2493332 or http://dx.doi.org/10.2139/ssrn.2493332

Simplice Asongu (Contact Author)

African Governance and Development Institute ( email )

P.O. Box 8413
Yaoundé, 8413
Cameroon

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