Access to Finance Thresholds and the Finance-Growth Nexus

Ben Jelili, Riadh and Abdmoulah, Walid (2013): Access to Finance Thresholds and the Finance-Growth Nexus. Published in: ECONOMIC PAPERS , Vol. 32, (December 2013): pp. 522-534.

Abstract

Based on Aghion et al. (2005), this article provides new insights regarding whether financial development can affect economic growth non-linearly by adopting the concept of threshold effects. The empirical approach adopted in this article allows for the finance-growth relationship to be piecewise linear with a set of indicators including access to finance acting as a regime-switching trigger. Using cross-country observations from 144 countries stretching from 1985 to 2009, strong evidence of threshold effects in finance-growth link is found. It is suggested that financial development in general, and access to finance in particular, is among the important forces contributing to crosscountry (non)-convergences in growth rates.

• Item Type: MPRA Paper
• Language: English
• Keywords: Financial development, Access to finance, Economic growth, Threshold regression.
• Subjects: C - Mathematical and Quantitative Methods > C5 - Econometric Modeling > C54 - Quantitative Policy Modeling; E - Macroeconomics and Monetary Economics > E2 - Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy > E20 - General

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