Exploring the moderating effect of regulatory quality on the relationship between financial development and economic growth/economic volatility for developed and developing countries

IF 6.3 2区 经济学 Q1 BUSINESS, FINANCE
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Abstract

This study examines the moderating effect of regulatory quality on the relationship between financial development and economic growth/economic volatility. We employ the Panel Corrected Standard Error estimation method, supplemented by a robustness check using the Generalized Method of Moments. Our findings offer interesting insights into the relationship between financial development and outcomes for the economy. In developed countries, regulatory quality positively moderates the relationship between banking-based financial development and economic growth. Hence, policymakers should prioritize the maintenance of a high-quality institutional and regulatory environment conducive to both banking-based and market-based growth. Continual efforts to enhance regulatory quality and adopt robust approaches are imperative. Conversely, this study does not detect a significant moderating effect of regulatory quality on the relationship between financial development and economic growth in developing countries. Policymakers in these contexts must accelerate efforts to bolster institutional and regulatory frameworks, emphasizing the enhancement of regulatory quality. Care should be taken to avoid overly stringent regulations, particularly at lower levels of financialization, to prevent potential counter-productivity. Instead, a gradual approach to improving regulatory quality is advisable. Furthermore, policymakers should recognize that regulatory quality mitigates the contribution of banking-based financial development to economic volatility, a phenomenon observed in both developed and developing countries.

探索发达国家和发展中国家监管质量对金融发展与经济增长/经济波动之间关系的调节作用
本研究探讨了监管质量对金融发展与经济增长/经济波动之间关系的调节作用。我们采用了面板校正标准误差估计方法,并辅以广义矩方法进行稳健性检验。我们的研究结果为金融发展与经济结果之间的关系提供了有趣的见解。在发达国家,监管质量对以银行业为基础的金融发展与经济增长之间的关系起到积极的调节作用。因此,政策制定者应优先考虑维护有利于银行业和市场经济增长的高质量制度和监管环境。当务之急是继续努力提高监管质量,并采用稳健的方法。相反,本研究并未发现监管质量对发展中国家金融发展与经济增长之间的关系有显著的调节作用。在这种情况下,决策者必须加快努力,加强体制和监管框架,强调提高监管质量。应注意避免过于严格的监管,尤其是在金融化水平较低的情况下,以防止潜在的反作用。相反,最好采取循序渐进的方式提高监管质量。此外,政策制定者应认识到,监管质量可减轻以银行业为基础的金融发展对经济波动的影响,这种现象在发达国家和发展中国家都存在。
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来源期刊
CiteScore
7.60
自引率
3.80%
发文量
130
审稿时长
26 days
期刊介绍: Peer Review under the responsibility of Borsa İstanbul Anonim Sirketi. Borsa İstanbul Review provides a scholarly platform for empirical financial studies including but not limited to financial markets and institutions, financial economics, investor behavior, financial centers and market structures, corporate finance, recent economic and financial trends. Micro and macro data applications and comparative studies are welcome. Country coverage includes advanced, emerging and developing economies. In particular, we would like to publish empirical papers with significant policy implications and encourage submissions in the following areas: Research Topics: • Investments and Portfolio Management • Behavioral Finance • Financial Markets and Institutions • Market Microstructure • Islamic Finance • Financial Risk Management • Valuation • Capital Markets Governance • Financial Regulations
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