Abstract
This study examines the relationship between financial development and economic growth across Chinese provinces with switching causality. Four states are considered: bidirectional causality (state 1); one-way causality from growth to finance (state 2); one-way causality from finance to growth (state 3); and non-causality (state 4). While state 3 dominates in developed regions, states 1 and 3 occur intermittently in other regions. This implies that the demand for financial services induced by local economic growth plays a stronger role in driving financial development in under-developed regions. Consistent with prior research, bank loans negatively affect economic growth in China.
Original language | English |
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Pages (from-to) | 443-462 |
Number of pages | 20 |
Journal | Journal of International Trade and Economic Development |
Volume | 27 |
Issue number | 4 |
DOIs | |
Publication status | Published - 19 May 2018 |
Keywords
- China regions
- economic growth
- Financial development
- switching causality
ASJC Scopus subject areas
- Geography, Planning and Development
- Development
- Aerospace Engineering