How Does the Various Sectors of the Financial Market Influence Growth Around the Globe?

34 Pages Posted: 17 Jun 2020

See all articles by Richard Adjei Dwumfour

Richard Adjei Dwumfour

University of Ghana Business School, Accra-Ghana.

Matthew Ntow- Gyamfi

University of Ghana - University of Ghana Business School (UGBS); Government of Ghana - Bank of Ghana

Date Written: March 11, 2020

Abstract

We explore the links between financial markets, institutional quality and economic growth. We document that the unconditional effect of finance on growth is ambiguous. This variation is caused by regional bloc, income level and legal origin differences. Our results suggest that, for financial development (banking sector, insurance sector, stock market) to elicit positive effect on growth, there needs to be an effective institutional framework in place. However, in cases where finance in itself elicits positive effect on growth, further tightening of the institutional framework could be harmful to growth; hence, must be done with caution. Policy implications are discussed.

Keywords: Bank profitability; Europe & Central Asia; Latin America and the Caribbean; Middle East & North Africa; Sub-Saharan African; East Asian & Pacific

JEL Classification: D53, E42, N2, G21, G22, O43

Suggested Citation

Dwumfour, Richard Adjei and Ntow- Gyamfi, Matthew, How Does the Various Sectors of the Financial Market Influence Growth Around the Globe? (March 11, 2020). Available at SSRN: https://ssrn.com/abstract=3608407 or http://dx.doi.org/10.2139/ssrn.3608407

Richard Adjei Dwumfour (Contact Author)

University of Ghana Business School, Accra-Ghana. ( email )

Volta Rd
Accra
Ghana

Matthew Ntow- Gyamfi

University of Ghana - University of Ghana Business School (UGBS) ( email )

Volta Rd
Accra
Ghana

Government of Ghana - Bank of Ghana ( email )

1st Thorpe Road
Accra
Ghana

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