The Role of Financial Development in Economic Growth—Empirical Studies on Taiwan and China
Date Issued
2011
Date
2011
Author(s)
Xiao, Meng-Ni
Abstract
For the past several decades, the restrictions on financial institution have been lessened to foster economic development. Nevertheless, the question of whether financial liberation ignites economic growth remains unsettled in literature. The purpose of this paper is to figure out whether the financial reformation and opening are beneficial to economic development as anticipated.
This paper incorporates GMM model to investigate the relationship between the following three factors and the economic growth in Taiwan and Mainland China: the development of financial institutions, the characteristics of the stock market, and the capital movement. The results indicate that the contribution of the development of financial institutions is positive. Second, market liquidity has advantages to the economy. Besides, stock market scale and market fluctuations have mixed results. Third, overseas investment and foreign direct investment also has mixed results.
Subjects
Financial development
economic growth
general method of movement
Type
thesis
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