Financial Accessibility and Economic Growth

Journal of East Asian Economic Integration, Vol. 19, No. 2 (June 2015)

24 Pages Posted: 8 Jul 2015 Last revised: 6 Nov 2016

See all articles by Myagmarsuren Boldbaatar

Myagmarsuren Boldbaatar

National University of Mongolia - Department of Economics

Choong Lyol Lee

Korea University Sejong - College of Business and Economics

Date Written: June 30, 2015

Abstract

This paper investigates the empirical evidence on the relationship between financial accessibility and economic growth to test the conventional hypothesis that improved financial accessibility leads to financial development and economic growth. First, we built a dynamic panel model on the relationship between financial accessibility and economic growth with a set of controlled variables. We then used several financial access indicators from 165 countries, collected from 2004 to 2011, applying the generalized method of moments (GMM) estimators to estimate their relationship. From these estimations, we found that high financial accessibility leads to high income in general. In addition, we found that an increase in financial access indicators had a greater impact on economic growth in low-income countries than it did on economic growth in high-income countries.

Keywords: Economic Growth, Financial Accessibility, Financial Services, Financial Systems, GMM

JEL Classification: G15, G17, O16

Suggested Citation

Boldbaatar, Myagmarsuren and Lee, Choong Lyol, Financial Accessibility and Economic Growth (June 30, 2015). Journal of East Asian Economic Integration, Vol. 19, No. 2 (June 2015). Available at SSRN: https://ssrn.com/abstract=2627442

Myagmarsuren Boldbaatar

National University of Mongolia - Department of Economics ( email )

Baga of toyruu-ya 350994
Mongolia

Choong Lyol Lee (Contact Author)

Korea University Sejong - College of Business and Economics ( email )

Sejong
Korea, Republic of (South Korea)

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