Manufacturing Growth and Financial Development: Evidence from OECD Countries
Abstract
Recent theoretical models conjecture that the development of the financial sector is essential for economic growth. We investigate this hypothesis from a time-series perspective and find that financial sector GDP is cointegrated for many OECD countries not so much with manufacturing GDP but mostly with manufacturing total factor productivity. Moreover, this relation is in some instances characterized by long-run causality in the sense of Granger and Lin. However, even within this homogeneous group of countries, the variety of results suggests a more complex picture than is apparent from cross-sectional evidence.
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Finance exerts a causal impact on growth.
“A considerable body of work suggests that finance exerts a causal impact on growth (e.g., Demetriades and Hussein 1996;Arestis and Demetriades 1997;Neusser and Kugler 1998;Rousseau andWachtel 1998, 2000;Rousseau and Sylla 1999;Arestis, Demetriades and Luintel 2000;Xu 2000;Christopoulos and Tsionas 2004;Ang and Madsen 2012).”
From Finance, Growth, and Inequality (2021) · cites this paper as Neusser and Kugler 1998
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- Authors
- Neusser, K., & Kugler, M.
- Affiliations
- University of Bern (CH)
- University of California, Berkeley (US)
- Venue
- Review of Economics and Statistics
- Publisher
- MIT Press - Journals
- Published
- 1998-11
- Volume
- 80
- Issue
- 4
- Pages
- 638-646
- ISSN
- 0034-6535 (ISSN-L)
- 1530-9142
- OpenAlex
- W2158437796
- Cited by
- 414
- References
- 0
- Citations by year
- 2026: 6 · 2025: 3 · 2024: 6 · 2023: 11 · 2022: 17 · 2021: 16 · 2020: 19 · 2019: 18 · 2018: 11 · 2017: 13 · 2016: 14 · 2015: 24 · 2014: 32 · 2013: 27 · 2012: 15
- FWCI
- 29.28
- Type
- journal article
- Language
- en
- Open access
- closed
- Locations
- The Review of Economics and Statistics (publishedVersion)
- RePEc: Research Papers in Economics (submittedVersion)
- ePrints Soton (University of Southampton) (submittedVersion)
- 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
- financial development, manufacturing growth, economic growth, total factor productivity, financial services, cointegration, Granger causality, OECD countries
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