The Financial Development and Growth Nexus: A Meta‐Analysis

17 Pages Posted: 22 Jun 2015

See all articles by Philip Arestis

Philip Arestis

University of Cambridge - Department of Land Economy; Universidad del País Vasco (UPV/EHU)

Georgios E. Chortareas

University of Athens - Faculty of Economics; University of Essex - Department of Accounting, Finance & Management; King's College London

Georgios Magkonis

University of Bradford

Date Written: July 2015

Abstract

We conduct a meta‐analysis of the literature of financial development and economic growth. We cover a large number of empirical studies and estimations that have been published in journal articles. We measure the degree of heterogeneity and identify the causes of the observed differentiation. Among the most significant factors behind this heterogeneity is the choice of financial‐variable proxies, the kind of data used as well as whether a study takes into account the issue of endogeneity. Our results suggest that the empirical literature on the finance-growth nexus is not free from publication bias. Also, a genuine positive effect exists between financial development and economic growth.

Keywords: Financial development, Growth, Meta‐analysis

Suggested Citation

Arestis, Philip and Chortareas, Georgios and Magkonis, Georgios, The Financial Development and Growth Nexus: A Meta‐Analysis (July 2015). Journal of Economic Surveys, Vol. 29, Issue 3, pp. 549-565, 2015. Available at SSRN: https://ssrn.com/abstract=2620891 or http://dx.doi.org/10.1111/joes.12086

Philip Arestis (Contact Author)

University of Cambridge - Department of Land Economy ( email )

19 Silver Street
Cambridge, CB3 9EP
United Kingdom

Universidad del País Vasco (UPV/EHU)

Barrio Sarriena s/n
Leioa, Bizkaia 48940
Spain

Georgios Chortareas

University of Athens - Faculty of Economics ( email )

8 Pesmazoglou street
GR-10559 Athens
Greece
+(30) 210 3689805 (Phone)
+(30) 210 3689810 (Fax)

University of Essex - Department of Accounting, Finance & Management ( email )

Wivenhoe Park
Colchester CO4 3SQ
United Kingdom

King's College London ( email )

Strand
London, England WC2R 2LS
United Kingdom

Georgios Magkonis

University of Bradford

Bradford
Bradford, BD9 4JL
United States

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