Research Article
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Year 2018, Volume: 10 Issue: 1, 81 - 92, 01.01.2018

Abstract

References

  • Adamopoulos, A. (2010). Financial development and economic growth an empirical analysis for Ireland. International Journal of Economic Sciences and Applied Research 3(1):75-88.
  • Christopoulos, D. K. and Tsionas, E. G. (2004). Financial development and Economic growth: Evidence from Panel Unit Root and Cointegration Tests,Journal of Development Economics 73: 55-74.
  • Čihák, M., Demirgüç-Kunt, A., Feyen, E. & Levine, R. (2012). Benchmarking financial systems around the world. Policy Research Paper, 6175. World Bank: Financial and Private Sector Development.
  • Djoumessi, E.C.K. (2009). Financial development and economic growth: a comparative study between Cameroon and South Africa. Pretoria: University of South Africa. (Dissertation - Masters).
  • Domar, E. D. (1946). Capital expansion, rate of growth, and employment. Econometrica. Journal of the Econometric Society, 1:137-147.
  • Hassan, M.K., Sanchez, B. & Yu, J. (2011). Financial development and economic growth: New evidence from panel data. The Quarterly Review of Economics and Finance, 51(1):88-104.
  • Hicks, J. (1969). A theory of economic history. Oxford: Clarendon Press.
  • Im, K.S., Pesaran, M.H. & Y. Shin., 2003. Testing for Unit Roots in Heterogeneous Panels. Journal of Econometrics, 115:53-74.
  • Ince, M. (2011). Financial liberalization, Financial development and Economic growth: An Empirical analysis of Turkey, Journal of Yasar University, 23(6):3782-3793.
  • International Monetary Fund. (2007). International financial statistics yearbook, Washington DC: International Monetary Fund.
  • International Monetary Fund. (2011). New growth drivers for low-income countries: the role of BRICs.
  • http://www.imf.org/external/np/pp/eng/2011/011211.pdf Date of access: 20 February 2015.
  • Levine, R. (1997). Financial Development and Economic Growth: Views and Agenda. Journal of Economic Literature, 35(2):688-726.
  • Levine, R. (1999). Law, finance and economic growth. Journal of Financial Intermediation, 8(2):36-67.
  • Levine, R. (2001). Legal theories of financial development. Finance Department Minneapolis: University of Minnesota.
  • Levine, R. 2005. Finance and growth: theory and evidence. Handbook of economic growth, 1(1):865-934.
  • Lucas, R. E. (1988). On the mechanics of economic development, Journal of Monetary Economics, 22(1).
  • Mohr, P. (1998). Economic indicators. 4th ed. Pretoria: UNISA Press. Pagano, M. (1993). Financial markets and growth: An overview. European Economic Review, 37(1):613-622.
  • Robinson, J. (1952). The generalization of the general theory. The rate of interest and other essays. London: MacMillan
  • Rodrik, D. (2002). Institutions, integration, and geography: In search of the deep determinants of economic growth. Modern Economic Growth: Analytical Country Studies.
  • Romer, P.M. (1986). Increasing returns and long run growth. Journal of Political Economy, 94(5):1002–1037.
  • Schumpeter, J.A. (1932). The theory of economic development, Cambridge, Mass.: Harvard University Press.
  • Schumpeter, J.A., & Opie, R. (1934). The theory of economic development: An inquiry into profits, capital, credit, interest, and the business cycle. Cambridge, Mass.: Harvard University Press.
  • Smith, A. (1904). The wealth of nations. 5th ed. New York: Bantam Dell.
  • Solow, R. M. (1956). A contribution to the theory of economic growth. Quarterly Journal of Economics, 70:65-94.
  • Stats, S.A., (2013). Millennium development goals country report. Pretoria, South Africa: Statistics SA.
  • Torres-Ryna, O. (2003). Panel Data Analysis: Fixed & Random Effects (using strata 10.x). [PowerPoint Slides]. Princeton University.
  • Tridico, P. (2010). Growth, inequality and poverty in emerging and transition economies. Transition Studies Review, 16(4):979-1001.
  • World Bank. (2013). World Development Report. Washington, DC: Oxford University Press.
  • World Economic Forum. (2011). World Development Report. NY: Oxford University Press.
  • Wurgler, J. (2000). Financial markets and the allocation of capital. Journal of Financial Economics, 1(1):1-30.

AN ANALYSIS OF THE RELATIONSHIP BETWEEN ECONOMIC GROWTH AND FINANCIAL DEVELOPMENT FOR BRICS COUNTRIES

Year 2018, Volume: 10 Issue: 1, 81 - 92, 01.01.2018

Abstract

Many regions across the world are in dire need of financial development and economic growth. Tentatively, a relationship between the concepts exists. However, the direction of causality is of great interest, particularly in relation to the country’s level of development. Financial development in developed countries tends to be more progressive than those of developing countries. This research studies the existence of a relationship between financial development and economic growth using a sample of BRICS countries for the period of 1996 to 2016. A balanced panel data analysis was used to analyse secondary data from five BRICS countries (Brazil, Russia, India, China and South Africa). Variables used include: GDP growth, foreign direct investment, population, real interest rates, gross fixed capital formation, and domestic credit to private sector, and were selected on the availability of data. To analyse relationships between economic growth and financial development, this study used time series data obtained from the World Bank and International Monetary Fund (IMF). Findings of the study suggest that there is a longrun and short-run relationship between economic growth and financial development to some degree. BRICS countries should focus on those variables that are more suitable to generate more growth within their economy as it may differ from one economy to another when referring to financial statistics and resources.

References

  • Adamopoulos, A. (2010). Financial development and economic growth an empirical analysis for Ireland. International Journal of Economic Sciences and Applied Research 3(1):75-88.
  • Christopoulos, D. K. and Tsionas, E. G. (2004). Financial development and Economic growth: Evidence from Panel Unit Root and Cointegration Tests,Journal of Development Economics 73: 55-74.
  • Čihák, M., Demirgüç-Kunt, A., Feyen, E. & Levine, R. (2012). Benchmarking financial systems around the world. Policy Research Paper, 6175. World Bank: Financial and Private Sector Development.
  • Djoumessi, E.C.K. (2009). Financial development and economic growth: a comparative study between Cameroon and South Africa. Pretoria: University of South Africa. (Dissertation - Masters).
  • Domar, E. D. (1946). Capital expansion, rate of growth, and employment. Econometrica. Journal of the Econometric Society, 1:137-147.
  • Hassan, M.K., Sanchez, B. & Yu, J. (2011). Financial development and economic growth: New evidence from panel data. The Quarterly Review of Economics and Finance, 51(1):88-104.
  • Hicks, J. (1969). A theory of economic history. Oxford: Clarendon Press.
  • Im, K.S., Pesaran, M.H. & Y. Shin., 2003. Testing for Unit Roots in Heterogeneous Panels. Journal of Econometrics, 115:53-74.
  • Ince, M. (2011). Financial liberalization, Financial development and Economic growth: An Empirical analysis of Turkey, Journal of Yasar University, 23(6):3782-3793.
  • International Monetary Fund. (2007). International financial statistics yearbook, Washington DC: International Monetary Fund.
  • International Monetary Fund. (2011). New growth drivers for low-income countries: the role of BRICs.
  • http://www.imf.org/external/np/pp/eng/2011/011211.pdf Date of access: 20 February 2015.
  • Levine, R. (1997). Financial Development and Economic Growth: Views and Agenda. Journal of Economic Literature, 35(2):688-726.
  • Levine, R. (1999). Law, finance and economic growth. Journal of Financial Intermediation, 8(2):36-67.
  • Levine, R. (2001). Legal theories of financial development. Finance Department Minneapolis: University of Minnesota.
  • Levine, R. 2005. Finance and growth: theory and evidence. Handbook of economic growth, 1(1):865-934.
  • Lucas, R. E. (1988). On the mechanics of economic development, Journal of Monetary Economics, 22(1).
  • Mohr, P. (1998). Economic indicators. 4th ed. Pretoria: UNISA Press. Pagano, M. (1993). Financial markets and growth: An overview. European Economic Review, 37(1):613-622.
  • Robinson, J. (1952). The generalization of the general theory. The rate of interest and other essays. London: MacMillan
  • Rodrik, D. (2002). Institutions, integration, and geography: In search of the deep determinants of economic growth. Modern Economic Growth: Analytical Country Studies.
  • Romer, P.M. (1986). Increasing returns and long run growth. Journal of Political Economy, 94(5):1002–1037.
  • Schumpeter, J.A. (1932). The theory of economic development, Cambridge, Mass.: Harvard University Press.
  • Schumpeter, J.A., & Opie, R. (1934). The theory of economic development: An inquiry into profits, capital, credit, interest, and the business cycle. Cambridge, Mass.: Harvard University Press.
  • Smith, A. (1904). The wealth of nations. 5th ed. New York: Bantam Dell.
  • Solow, R. M. (1956). A contribution to the theory of economic growth. Quarterly Journal of Economics, 70:65-94.
  • Stats, S.A., (2013). Millennium development goals country report. Pretoria, South Africa: Statistics SA.
  • Torres-Ryna, O. (2003). Panel Data Analysis: Fixed & Random Effects (using strata 10.x). [PowerPoint Slides]. Princeton University.
  • Tridico, P. (2010). Growth, inequality and poverty in emerging and transition economies. Transition Studies Review, 16(4):979-1001.
  • World Bank. (2013). World Development Report. Washington, DC: Oxford University Press.
  • World Economic Forum. (2011). World Development Report. NY: Oxford University Press.
  • Wurgler, J. (2000). Financial markets and the allocation of capital. Journal of Financial Economics, 1(1):1-30.
There are 31 citations in total.

Details

Primary Language English
Subjects Business Administration
Journal Section Research Article
Authors

A Stiglingh This is me

D Vijloen This is me

Publication Date January 1, 2018
Published in Issue Year 2018 Volume: 10 Issue: 1

Cite

APA Stiglingh, A., & Vijloen, D. (2018). AN ANALYSIS OF THE RELATIONSHIP BETWEEN ECONOMIC GROWTH AND FINANCIAL DEVELOPMENT FOR BRICS COUNTRIES. International Journal of Economics and Finance Studies, 10(1), 81-92.
AMA Stiglingh A, Vijloen D. AN ANALYSIS OF THE RELATIONSHIP BETWEEN ECONOMIC GROWTH AND FINANCIAL DEVELOPMENT FOR BRICS COUNTRIES. IJEFS. January 2018;10(1):81-92.
Chicago Stiglingh, A, and D Vijloen. “AN ANALYSIS OF THE RELATIONSHIP BETWEEN ECONOMIC GROWTH AND FINANCIAL DEVELOPMENT FOR BRICS COUNTRIES”. International Journal of Economics and Finance Studies 10, no. 1 (January 2018): 81-92.
EndNote Stiglingh A, Vijloen D (January 1, 2018) AN ANALYSIS OF THE RELATIONSHIP BETWEEN ECONOMIC GROWTH AND FINANCIAL DEVELOPMENT FOR BRICS COUNTRIES. International Journal of Economics and Finance Studies 10 1 81–92.
IEEE A. Stiglingh and D. Vijloen, “AN ANALYSIS OF THE RELATIONSHIP BETWEEN ECONOMIC GROWTH AND FINANCIAL DEVELOPMENT FOR BRICS COUNTRIES”, IJEFS, vol. 10, no. 1, pp. 81–92, 2018.
ISNAD Stiglingh, A - Vijloen, D. “AN ANALYSIS OF THE RELATIONSHIP BETWEEN ECONOMIC GROWTH AND FINANCIAL DEVELOPMENT FOR BRICS COUNTRIES”. International Journal of Economics and Finance Studies 10/1 (January 2018), 81-92.
JAMA Stiglingh A, Vijloen D. AN ANALYSIS OF THE RELATIONSHIP BETWEEN ECONOMIC GROWTH AND FINANCIAL DEVELOPMENT FOR BRICS COUNTRIES. IJEFS. 2018;10:81–92.
MLA Stiglingh, A and D Vijloen. “AN ANALYSIS OF THE RELATIONSHIP BETWEEN ECONOMIC GROWTH AND FINANCIAL DEVELOPMENT FOR BRICS COUNTRIES”. International Journal of Economics and Finance Studies, vol. 10, no. 1, 2018, pp. 81-92.
Vancouver Stiglingh A, Vijloen D. AN ANALYSIS OF THE RELATIONSHIP BETWEEN ECONOMIC GROWTH AND FINANCIAL DEVELOPMENT FOR BRICS COUNTRIES. IJEFS. 2018;10(1):81-92.