Financial development and economic growth in Asian countries: evidence from the DCCE approach

IF 2.5 Q2 ECONOMICS

Eurasian Economic Review Pub Date : 2024-03-24 DOI:10.1007/s40822-024-00262-2

Yujue Wang, Nur Syazwani Mazlan, Wan Azman Saini Wan Ngah, Muhammad Faheem, Yifan Liang

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Abstract

Asia has constantly been in the spotlight regarding economic development as it has been the fastest-growing global region over recent decades. This study investigated the effect of financial development on economic growth in selected Asian countries at various stages of economic development. A recently introduced approach, the Dynamic Common Correlated Effects (DCCE) method, was applied to 12 Asian countries/areas covering 26 years (1995–2020). The 12 countries/areas were divided into three groups based on their current economic development status: underdeveloped, moderately, and highly developed. The study results indicated that the effect of financial development on economic growth varied for countries at different economic levels. The association between financial development and economic growth was strongly negative for underdeveloped countries. However, a positive relationship existed between the sampled moderately and highly developed countries/areas. This situation implied that financial development should not be considered a viable way to boost economic growth for countries with underdeveloped economies. Instead, countries with a higher economic status should priorities financial development to promote economic prosperity effectively.

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亚洲国家的金融发展与经济增长：DCCE 方法提供的证据

近几十年来，亚洲一直是全球经济发展最快的地区，因此一直是经济发展的焦点。本研究调查了处于不同经济发展阶段的部分亚洲国家的金融发展对经济增长的影响。研究采用了最近引入的动态共同相关效应（DCCE）方法，对 12 个亚洲国家/地区进行了为期 26 年（1995-2020 年）的研究。这 12 个国家/地区根据其目前的经济发展状况分为三组：欠发达、中度发达和高度发达。研究结果表明，不同经济水平的国家金融发展对经济增长的影响各不相同。对于欠发达国家而言，金融发展与经济增长之间的关系是强烈的负相关。然而，在抽样调查的中度和高度发达的国家/地区之间却存在正相关关系。这种情况表明，对于经济欠发达国家而言，金融发展不应被视为促进经济增长的可行途径。相反，经济地位较高的国家应优先发展金融，以有效促进经济繁荣。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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来源期刊

Eurasian Economic Review ECONOMICS-

CiteScore

6.00

自引率

2.90%

发文量

期刊介绍： The mission of Eurasian Economic Review is to publish peer-reviewed empirical research papers that test, extend, or build theory and contribute to practice. All empirical methods - including, but not limited to, qualitative, quantitative, field, laboratory, and any combination of methods - are welcome. Empirical, theoretical and methodological articles from all fields of finance and applied macroeconomics are featured in the journal. Theoretical and/or review articles that integrate existing bodies of research and that provide new insights into the field are highly encouraged. The journal has a broad scope, addressing such issues as: financial systems and regulation, corporate and start-up finance, macro and sustainable finance, finance and innovation, consumer finance, public policies on financial markets within local, regional, national and international contexts, money and banking, and the interface of labor and financial economics. The macroeconomics coverage includes topics from monetary economics, labor economics, international economics and development economics. Eurasian Economic Review is published quarterly. To be published in Eurasian Economic Review, a manuscript must make strong empirical and/or theoretical contributions and highlight the significance of those contributions to our field. Consequently, preference is given to submissions that test, extend, or build strong theoretical frameworks while empirically examining issues with high importance for theory and practice. Eurasian Economic Review is not tied to any national context. Although it focuses on Europe and Asia, all papers from related fields on any region or country are highly encouraged. Single country studies, cross-country or regional studies can be submitted.