Yes / This study considers the effects of financial development on output in a panel cointegration framework, focusing on the implications of trade and financial openness. Our analysis indicates that after controlling for cross-sectional dependence, the typical relationship between finance and output does not hold in the long run. This relationship, however, is re-established once we account for economic openness. While trade openness emerges as more important for developing countries, financial openness is more important for advanced economies. In the long run, causality runs from financial development to output in the advanced economies, while in developing economies causality is bidirectional. There is no short-run causality between financial development and output, however.
| Identifer | oai:union.ndltd.org:BRADFORD/oai:bradscholars.brad.ac.uk:10454/7167 |
| Date | 02 1900 |
| Creators | Chortareas, G., Magkonis, Georgios, Moschos, D., Panagiotidis, T. |
| Source Sets | Bradford Scholars |
| Language | English |
| Detected Language | English |
| Type | Article, Accepted Manuscript |
| Rights | © 2015 Wiley This is the peer reviewed version of the following article: Chortareas G, Magkonis G, Moschos D and Panagiotidis T (2015) Financial Development and Economic Activity in Advanced and Developing Open Economies: Evidence from Panel Cointegration. Review of Development Economics. 19(1): 163-177, which has been published in final form at http://dx.doi.org/10.1111/rode.12132. This article may be used for non-commercial purposes in accordance with Wiley Terms and Conditions for Self-Archiving. |
Page generated in 0.002 seconds