Recent literature has established a positive correlation between financial development and economic growth. While papers such as Bencivenga, Smith and Starr (1995) identify potential nonlinearities in this relationship, empirical research to date has allowed for only linear relationships. This...

This paper evaluates (1) whether the exogenous component of financial intermediary development influences economic growth and (2) whether cross-country differences in legal and accounting systems (e.g., creditor rights, contract enforcement, and accounting standards) explain differences in the...

In this paper we analyse the effects of all sources of the accumulation of nonfinancial debt (household, corporate as well as government) on economic growth in ten euro-area countries during the 1980-2015 period. To this end, we make use of three models (a baseline, an asymmetric and a threshold...

This study examines the rapid expansion and diffusion of Islamic banking and its relationship with real economic activity in Pakistan. Additionally, the study also highlights the functional role of Islamic banking for greater economic activity and growth in Pakistan. Two major balance sheet...

The worst of the ailments distressing the economy of Zimbabwe continue to be sycophantically dubious and characteristically dystopian policies that are still causing malicious effects on private investment and yet private investment is an indisputably powerful means for sustainable economic...

This paper reassesses the role of financial intermediation in inducing the European financial crisis of 2008. Our empirical investigation sheds light on the causal effects of excessive household leverage on economic structural distortions, beyond the already established links between credit...

The aggregate saving indicator does not directly reflect changes in individuals' microeconomic behavior. From the official statistics' point of view, households choose between spending, which generates additional income and consumption in the economy, and setting money aside, which does not....

The relationship between venture capital and growth is examined using an endogenous growth model incorporating dynamic contracts between entrepreneurs and venture capitalists. At each stage of financing, venture capitalists evaluate the viability of startups. If viable, venture capitalists...

This paper studies whether there is a connection between finance and growth at the firm level. It employs a new dataset of 150,165 equity and bond issuances around the world, matched with income and balance sheet data for 62,653 listed firms in 65 countries over 1990-2016. Three main patterns...

Using micro-data on firm-specific borrowing costs and wages, we demonstrate that distortions in firms' policies can be empirically measured using firm-level gaps between marginal revenue products and user costs (MRP-cost gaps). We estimate MRP-cost gaps for 4.7 million firm-year observations in...