Joseph A. Schumpeter is one of the most famous economists of the 20th century and the ’patron saint’ of the finance and growth literature. We have discovered that the prevailing literature has, however, misinterpreted Schumpeter, which leads to puzzling empirical results and difficulties in...

The existing weight of evidence suggests that financial structure (the classification of a financial system as bank-based versus market-based) is irrelevant for economic growth. This contradicts the common belief that the institutional structure of a financial system matters. We re-examine this...

Using annual panel data of 126 developing countries over the period from 1970 to 2016, this study investigates effects of remitted funds' volatility and consumption on financial development. Our results, after controlling for endogeneity, document a significant adverse impact of remittances'...

This paper evaluates the dynamic causal relationship between financial development, savings, investment and economic growth in Botswana from 1976-2014 by employing a multivariate causality model. Results reveal that it is chiefly investment that drives the bank-related and stock exchange-based...

We revisit the relationship between financial development and economic growth in a panel of 52 middle income countries over the 1980-2008 period, using pooled mean group estimator in a dynamic heterogeneous panel setting. We show that financial development does not have a linear positive...

Classical finance has undergone a major change in recent years. In our modern world, where risk becomes more complex and difficult to calculate, more sophisticated mathematical techniques and products are needed to quantify such new risks. The financial sector should have a solid structure in...

This study provides evidence on the role of financial development in accounting for economic growth in low- and middle-income countries classified by geographic regions. To document the relationship between financial development and economic growth, we estimate both panel regressions and...

In the last decade, Arab countries achieved significant progress in financial sector reforms in recognition that economic growth is often associated with increasing financial deepening. In light of these developments, it is important to investigate the relationship between financial development...

This paper uses new data and new econometric techniques to investigate the impact of international financial integration on economic growth and also to assess whether this relationship depends on the level of economic development, financial development, legal system development, government...