What Type of Finance Matters for Growth? Bayesian Model Averaging Evidence

We examine the effect of finance on long-term economic growth using Bayesian model averaging to address model uncertainty in cross-country growth regressions. The literature largely focuses on financial indicators that assess the financial depth of banks and stock markets. We examine these indicator...

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Bibliographic Details
Main Authors:	Hasan, Iftekhar, Horvath, Roman, Mares, Jan
Format:	Journal Article
Published:	Published by Oxford University Press on behalf of the World Bank 2019
Subjects:	FINANCIAL MARKETS PRIVATE SECTOR BAYESIAN MODEL BANKING STOCK MARKETS BOND MARKET FINANCIAL INTERMEDIATION
Online Access:	http://hdl.handle.net/10986/32782

id	okr-10986-32782
recordtype	oai_dc
spelling	okr-10986-327822021-05-25T10:54:37Z What Type of Finance Matters for Growth? Bayesian Model Averaging Evidence Hasan, Iftekhar Horvath, Roman Mares, Jan FINANCIAL MARKETS PRIVATE SECTOR BAYESIAN MODEL BANKING STOCK MARKETS BOND MARKET FINANCIAL INTERMEDIATION We examine the effect of finance on long-term economic growth using Bayesian model averaging to address model uncertainty in cross-country growth regressions. The literature largely focuses on financial indicators that assess the financial depth of banks and stock markets. We examine these indicators jointly with newly developed indicators that assess the stability and efficiency of financial markets. Once we subject the finance-growth regressions to model uncertainty, our results suggest that commonly used indicators of financial development are not robustly related to long-term growth. However, the findings from our global sample indicate that one newly developed indicator—the efficiency of financial intermediaries—is robustly related to long-term growth. 2019-12-04T22:29:59Z 2019-12-04T22:29:59Z 2018-06 Journal Article World Bank Economic Review 1564-698X http://hdl.handle.net/10986/32782 CC BY-NC-ND 3.0 IGO http://creativecommons.org/licenses/by-nc-nd/3.0/igo World Bank Published by Oxford University Press on behalf of the World Bank Publications & Research :: Journal Article Publications & Research
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
topic	FINANCIAL MARKETS PRIVATE SECTOR BAYESIAN MODEL BANKING STOCK MARKETS BOND MARKET FINANCIAL INTERMEDIATION
spellingShingle	FINANCIAL MARKETS PRIVATE SECTOR BAYESIAN MODEL BANKING STOCK MARKETS BOND MARKET FINANCIAL INTERMEDIATION Hasan, Iftekhar Horvath, Roman Mares, Jan What Type of Finance Matters for Growth? Bayesian Model Averaging Evidence
description	We examine the effect of finance on long-term economic growth using Bayesian model averaging to address model uncertainty in cross-country growth regressions. The literature largely focuses on financial indicators that assess the financial depth of banks and stock markets. We examine these indicators jointly with newly developed indicators that assess the stability and efficiency of financial markets. Once we subject the finance-growth regressions to model uncertainty, our results suggest that commonly used indicators of financial development are not robustly related to long-term growth. However, the findings from our global sample indicate that one newly developed indicator—the efficiency of financial intermediaries—is robustly related to long-term growth.
format	Journal Article
author	Hasan, Iftekhar Horvath, Roman Mares, Jan
author_facet	Hasan, Iftekhar Horvath, Roman Mares, Jan
author_sort	Hasan, Iftekhar
title	What Type of Finance Matters for Growth? Bayesian Model Averaging Evidence
title_short	What Type of Finance Matters for Growth? Bayesian Model Averaging Evidence
title_full	What Type of Finance Matters for Growth? Bayesian Model Averaging Evidence
title_fullStr	What Type of Finance Matters for Growth? Bayesian Model Averaging Evidence
title_full_unstemmed	What Type of Finance Matters for Growth? Bayesian Model Averaging Evidence
title_sort	what type of finance matters for growth? bayesian model averaging evidence
publisher	Published by Oxford University Press on behalf of the World Bank
publishDate	2019
url	http://hdl.handle.net/10986/32782
_version_	1764477285417615360

What Type of Finance Matters for Growth? Bayesian Model Averaging Evidence

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