While it is fair to say that almost all countries are better off than they were 70 years ago, this wealth seems to be distributed ever more unequally. One of the most significant questions – not just in economics, but social sciences in general – is how these differences came to be and what can be done to reduce them. Why do some countries thrive while others perish? What determines their growth?
This thesis explores one aspect of economic growth: the importance of a well developed, that is deep, accessible, efficient, and stable financial system. The discussion of this finance-growth-nexus can be traced back all the way to Schumpeter (1911) and was more recently revived by King and Levine (1993). Since then, numerous studies have investigated the subject – to this day without reaching a consensus. The objective of this thesis is to not only review some of the empirical and theoretical evidence , but to also replicate and expand on the research with recent data and a novel approach to measuring financial development. To this end, the author has compiled an unbalanced panel of 121 countries over the period from 1960 to 2017, which will serve as a basis for the empirical part of the argumentation
Inhaltsverzeichnis (Table of Contents)
- Introduction
- Background
- The Finance-Growth-Nexus
- Data
- A Finance-Augmented Growth Model
- Methodology
- Results
- Conclusion
Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)
This thesis investigates the relationship between financial development and economic growth. The author aims to shed light on the role of finance in driving economic expansion, particularly through the lens of foreign direct investment (FDI).
- The finance-growth nexus: Examining the complex relationship between financial development and economic growth.
- The role of FDI: Analyzing the impact of foreign direct investment on economic growth and its connection to financial development.
- Empirical analysis: Employing a finance-augmented growth model and econometric methods to investigate the relationships between variables.
- Data analysis: Using a comprehensive dataset to analyze the relationship between financial indicators and economic growth.
- Policy implications: Drawing conclusions on the role of finance in fostering economic growth and highlighting potential policy recommendations.
Zusammenfassung der Kapitel (Chapter Summaries)
- Introduction: Provides an overview of the research topic, highlighting the significance of financial development for economic growth and outlining the research objectives.
- Background: Delves into the theoretical foundation of the finance-growth nexus, discussing relevant literature and presenting a conceptual framework for understanding the relationship between finance and growth. This chapter also introduces the data used in the empirical analysis.
- A Finance-Augmented Growth Model: Presents the theoretical model used to analyze the relationship between financial development, FDI, and economic growth. This chapter explains the underlying assumptions and the derivation of the key equations.
- Methodology: Outlines the econometric methodology employed in the empirical analysis, including the estimation technique, variable selection, and statistical tests used to assess the model's robustness.
- Results: Presents the findings of the empirical analysis, analyzing the relationships between financial indicators, FDI, and economic growth. The results are discussed in the context of the theoretical framework and existing literature.
Schlüsselwörter (Keywords)
This thesis explores the intricate relationship between financial development, foreign direct investment (FDI), and economic growth. Key concepts explored include the finance-growth nexus, econometric modeling, data analysis, and the role of financial indicators in fostering economic expansion. The research investigates the impact of FDI as a crucial driver of growth, analyzing its connection to financial development and exploring potential policy implications.
- Citation du texte
- Niklas Humann (Auteur), 2021, Economic Growth. Does Finance Matter?, Munich, GRIN Verlag, https://www.grin.com/document/1131253
