What Matters in the Finance–Growth Nexus of Advanced Economies? Evidence from OECD Countries

MACIE Paper Series Nr. 2016/12

9 Pages Posted: 24 Jul 2016 Last revised: 9 Dec 2017

See all articles by Marc Steffen Rapp

Marc Steffen Rapp

University of Marburg - School of Business & Economics; University of Marburg - Marburg Centre for Institutional Economics (MACIE)

Iuliia Udoieva

University of Marburg - School of Business & Economics

Multiple version iconThere are 2 versions of this paper

Date Written: July 22, 2016

Abstract

While the majority of empirical work examines growth effects of financial sector “size”, we provide evidence for the role of financial sector “structure”. Focusing on stock markets, we study OECD countries over the 1994-2013 period and find that relatively larger stock markets facilitate economic growth and mitigate economic risk. We find no such effect for private bond markets and private credit volume. Overall, our results suggest that financial sector “structure” matters for economic development of advanced economies highlighting the importance of addressing financial structure gaps.

Revised version is available at: https://ssrn.com/abstract=2976237

Keywords: Finance, Financial development, Stock market, Economic development, Growth

JEL Classification: E44, G10, O40

Suggested Citation

Rapp, Marc Steffen and Udoieva, Iuliia, What Matters in the Finance–Growth Nexus of Advanced Economies? Evidence from OECD Countries (July 22, 2016). MACIE Paper Series Nr. 2016/12. Available at SSRN: https://ssrn.com/abstract=2813587 or http://dx.doi.org/10.2139/ssrn.2813587

Marc Steffen Rapp (Contact Author)

University of Marburg - School of Business & Economics ( email )

Am Plan 2
Marburg, D-35037
Germany

University of Marburg - Marburg Centre for Institutional Economics (MACIE) ( email )

Am Plan
Marburg, 35032
Germany

Iuliia Udoieva

University of Marburg - School of Business & Economics ( email )

Am Plan 2
Marburg, D-35037
Germany

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