Does too much finance harm economic growth?
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Prior studies have found a significant negative short-run relationship between financial inclusion and economic growth.
“This result is consistent with other scholars who found a significant negative relationship between these variables in the short run (Seven and Yetkiner 2016; Law and Singh 2014; Gour è ne and Mendy 2017; Collins and Ng'weno 2018; van Wyk and Kapingura 2021).”
From Financial Inclusion and Economic Growth in Sub-Saharan Africa—A Panel ARDL and Granger Non-Causality Approach (2023) · cites this paper as Law and Singh 2014
Law and Singh (2014) and Gour è ne and Mendy (2017) argued that the short-run negative relationship may be due to high inequality in the regions, low domestic saving, and high dependency on foreign capital sources.
“Law and Singh (2014) and Gour è ne and Mendy (2017) argued that one of the reasons for the short-run negative relationship may be due to the high inequality in the regions, the low level of domestic saving, and a high dependency on foreign capital sources.”
From Financial Inclusion and Economic Growth in Sub-Saharan Africa—A Panel ARDL and Granger Non-Causality Approach (2023) · cites this paper as Law and Singh 2014
Finance promotes growth until a threshold of finance to GDP ratio reached about 88%, after which the impact of finance on growth turns negative.
“Law and Singh (2014) identified that finance promotes growth until a threshold of finance to GDP ratio reached about 88%. Otherwise, the impact of finance on growth will turn negative as financial inclusion exceeds the threshold.”
From Financial Inclusion and Economic Growth in Sub-Saharan Africa—A Panel ARDL and Granger Non-Causality Approach (2023) · cites this paper as Law and Singh (2014)
The results differ from Law and Singh (2014), Arcand, Berkes, and Panizza (2015), and Ibrahim and Alagidede (2018).
“Our results also differ from Law and Singh (2014), Arcand, Berkes, and Panizza (2015), and Ibrahim and Alagidede (2018).”
From How Does Financial Development Impact Economic Growth in Pakistan?: New Evidence from Threshold Model (2020) · cites this paper as Law and Singh (2014)
The quadratic specification strategy imposes that the effect of finance on growth monotonically and symmetrically increases and decreases with the level of financial development.
“As Law and Singh (2014) argue, the quadratic specification strategy imposes that the effect of finance on growth monotonically and symmetrically increases and decreases with the level of financial development.”
From Finance-growth nexus in sub-Saharan Africa (2021) · cites this paper as Law and Singh (2014)
Finance is good for growth only up to a threshold level of financial development, becoming harmful after that level, in developed and developing countries.
“There is now significant empirical literature suggesting that finance is good for growth only up to a threshold level of financial development, becoming harmful after that level, in developed and developing countries.”
From Finance-growth nexus in sub-Saharan Africa (2021) · cites this paper as Law & Singh 2014
Higher financial development may not exert a positive impact on economic growth unless a certain level of financial development is reached.
“In particular, higher financial development may not exert a positive impact on economic growth unless a certain level of financial development is reached.”
From How Does Financial Development Impact Economic Growth in Pakistan?: New Evidence from Threshold Model (2020) · cites this paper as Law & Singh, 2014
Law and Singh (2014), using a panel of 87 countries, estimated threshold values of 0.88 and 0.91 for private sector credit to GDP and liquid liabilities to GDP, respectively.
“To this end, using a panel of 87 countries Law and Singh (2014) estimated threshold value of 0.88 and 0.91 respectively for private sector credit to GDP and liquid liabilities to GDP.”
From How Does Financial Development Impact Economic Growth in Pakistan?: New Evidence from Threshold Model (2020) · cites this paper as Law and Singh (2014)
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“Our results also differ from Law and Singh (2014), Arcand, Berkes, and Panizza (2015), and Ibrahim and Alagidede (2018).”
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Finance-growth nexus in sub-Saharan Africa
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- Authors
- Law, S. H., & Singh, N.
- Affiliations
- Universiti Putra Malaysia (MY)
- University of California, Santa Cruz (US)
- Corresponding author
- Law, Siong Hook
- Venue
- Journal of Banking & Finance
- Publisher
- Elsevier BV
- Published
- 2014-04
- Volume
- 41
- Pages
- 36-44
- ISSN
- 0378-4266 (ISSN-L)
- OpenAlex
- W2090721537
- Cited by
- 789
- References
- 59
- Citations by year
- 2026: 43 · 2025: 58 · 2024: 61 · 2023: 74 · 2022: 72 · 2021: 106 · 2020: 86 · 2019: 80 · 2018: 66 · 2017: 68 · 2016: 34 · 2015: 28 · 2014: 11 · 2012: 2
- FWCI
- 131.97
- Type
- journal article
- Language
- en
- Open access
- green
- escholarship.org
- Licence
- cc-by-nc-nd
- Locations
- Journal of Banking & Finance (publishedVersion)
- eScholarship (California Digital Library) (submittedVersion, cc-by-nc-nd)
- Topics
- Social Sciences › Economics, Econometrics and Finance › General Economics, Econometrics and Finance › Monetary Policy and Economic Impact
- Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Economic Growth and Productivity
- Social Sciences › Economics, Econometrics and Finance › General Economics, Econometrics and Finance › Economic Theory and Policy
- Keywords
- finance-growth relationship, financial development, economic growth, threshold effects, developed and developing countries
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