Stock Markets, Banks, Capital Formation and Long Run Growth--Cross Country Comparison

• Main Authors: Wu, I-Tien, 吳宜恬
• Other Authors: 沈中華
• Format: Others
• Language: en_US
• Published: 2000
• Online Access: http://ndltd.ncl.edu.tw/handle/86747472210791521798

碩士 === 東吳大學 === 國際貿易學系 === 88 === Abstract Whether the level of financial development is a good predictor of future economic growth and capital accumulation has long been a heated debate by researchers and scholars all over the world. Thus the main purpose of this research is to probe into the development of banks and stock markets and examine the empirical relationship of financial development and long run growth and its channel — capital accumulation at the same time. The method I use for examining causality uses panel data and exploits the cross-country and time-series dimension of the data. I conclude a broad array of indicators to measure the development of banks and stock markets, using data from 45 developing and industrial countries during the period from 1993 to 1998 from the related literatures and the real operation of stock markets and banks. Evidences showed that most of the developed markets in which investors are best protected from expropriation by the insiders usually have better economic performances and steadier fixed capital formation rates. The result is encouraging and meaningful because it should give the policy makers and the financial authorities some implications that the soundness of financial systems is the key to long run economic growth and capital formation. Besides, enforcement of the policy and regulations is essential as well to the maintenance of a healthy, transparent financial structure.