The present contribution tests whether countries can be pooled when studying the financegrowth nexus. Overall, our results point toward a ‘pragmatic’ positive answer, though considerable heterogeneity is present among developing countries.

A number of recent papers have examined the role of environmental variables in accounting for economic growth, and have concluded that net measures of national product are superior to gross measures in portraying the outcome of the growth process. This paper argues that the two measures are not...