The Relationship between Financial Development and Economic Growth Based on Dynamic Panel Data Approach in selected countries (۱۹۷۹-۲۰۰۳)

This paper investigates empirically the relationship between development of the financial system and economic performance using a panel data set for ۴۰ countries during the period ۱۹۷۹-۲۰۰۳ based on recent generalized-method-of moments technique developed for dynamic panels. The impact on GDP level and GDP growth of stock markets and banks is distinguished. Results show that the bank credits as a proxy for the banking system development have a positive and significant effect on the GDP level in the long-run, but there is no significant relationship among financial development proxies and GDP growth.