5.3 Limitations and future research
5.3.2 Suggestion for future research
Further research should be carried out in order to enhance, broaden and deepen the understanding of:
- The concepts of financial development and economic growth
- The determinants of financial development and economic growth by employing additional measures of macroeconomic structural and legal, regulatory and
supervisory variables that have the higher explanatory power to the level of financial development and economic growth.
The similar future research can be implemented with a larger sample size with various regions in worldwide, with different methodologies so that the results could be generalized to a larger population.
Future research on investigating the connection between financial development and economic growth should be conducted on how monetary policy index, financial repression, inflation rate, the risk of foreign debt, trade oppeness, the risk for exchange rate stability, corruption index, legal origin, stock market capitalization, public and private bond market capitalization and deposit money bank assets affect on finance and growth relationship.
Finally, the future research should be implemented in a relatively homogenous sample of countries (i.e. Asean countries, EU countries, etc..) for investigating the relationship between financial development and economic growth. As results, we can take advantage in providing the appropriate strategies and implications for policy makers for achieving a higher economic growth and financial development.
APPENDIX A: Sample of countries Country:
Benin Cameroon Jordan Philippines Turkey
Bolivia Chile Malaysia Singapore Vietnam
Brazil China Mexico Sri lanka
Bulgaria Egypt Pakistan Thailand
Bulgaria Indonesia Paraguay Tunisia
APPENDIX B: PANEL DATA OF ECONOMIC GROWTH AND FINANCIAL DEVELOPMENT VARIABLES:
VIETNAM AND ASEAN COUNTRIES FROM 1990 TO 2011.
ECONOMIC GROWTH DETERMINANTS
FINANCIAL DEVELOPMENT MEASUREMENT
GDP per
DOMCREDIT BANKCREDIT
GDPGROWTH capita FDI IMPORT EXPORT GOV GROSSDSA M2/GDP
COUNTRY YEAR /GDP /GDP
(%) (in constant (%) (%) (%) (%) (%) (%)
(%) (%)
2005 USD)
Malaysia 1990 9.009649265 3147.08807 5.298123397 72.42213349 74.54169592 13.79397238 34.47989183 69.41266813 64.37710414 72.67380968 1991 9.545464876 3355.571355 8.137869024 81.48649729 77.82612721 13.69418922 34.13038656 73.76109101 66.30928791 75.10986212 1992 8.885115904 3559.517075 8.762882741 74.62736625 75.98386152 13.01018148 36.71905063 108.5292254 102.2230306 114.610974 1993 9.894946841 3813.189065 7.482896923 79.02062993 78.92074246 12.63117485 39.08404962 106.4604218 113.0349629 112.5045697 1994 9.212042799 4060.355831 5.829421782 90.75462459 89.15122903 12.26491274 39.59889713 109.2177395 111.0395444 112.2179952 1995 9.82908212 4347.815999 4.703505551 98.02447422 94.08959516 12.37324276 39.70522247 124.4147154 115.6303739 126.7069141 1996 10.00270109 4662.48099 5.035523125 90.19047588 91.57579314 11.10537471 42.86435276 141.6331837 120.1247792 142.4233056 1997 7.32274295 4878.608007 5.127856302 92.37566515 93.28944692 10.76704658 43.88686886 158.3850462 125.5068705 163.3545281 1998 -7.359415382 4408.533561 2.997426414 93.74848014 115.7437334 9.768997234 48.6705754 158.5053858 125.1518967 162.1271868 1999 6.137609882 4568.553441 4.921466532 96.25952311 121.3113911 10.98668733 47.43387028 149.1529789 132.1210352 150.1057735 2000 8.858868102 4861.857591 4.038428624 100.5970803 119.8097087 10.16523523 46.0803982 134.9998539 122.6987503 138.3721725 2001 0.517675315 4783.877734 0.597029318 92.96214465 110.4024914 12.03928765 41.83828305 129.1013756 138.4607025 146.5313014 2002 5.390988315 4940.986535 3.176562382 91.0509299 108.3053028 12.95780675 42.03197699 121.8273449 133.1044669 143.6412777 2003 5.788499281 5126.855916 2.244196681 87.25168291 106.9434461 12.96800862 42.4551483 118.9741489 132.3112718 139.8479523 2004 6.783437736 5372.234083 3.706797624 95.00092818 115.3733377 12.57994971 43.4221851 111.9376051 131.7113689 127.4836021 2005 5.332139139 5553.943582 2.734416263 90.95565118 112.8991845 11.47362747 44.34017628 106.5246279 124.9643518 117.6558676 2006 5.585031035 5756.408216 4.727135005 90.39137917 112.1849169 11.16763602 44.49678026 103.6633093 129.3375761 114.5757975 2007 6.298426482 6007.900573 4.68680271 86.29818062 106.1693733 11.56695499 43.2807533 101.5808385 125.2033193 109.4287223 2008 4.832105638 6185.512962 3.278319621 77.16884777 99.49983635 11.50480292 43.7895806 96.74837916 119.5903958 110.8486504 2009 -1.513682716 5984.915281 0.056693937 71.14207879 91.41666363 13.04860154 38.1101145 111.6067334 139.1654257 131.0534083 2010 7.425006152 6318.901213 3.71410888 76.58635124 93.74591211 12.19410036 40.30793729 110.6801627 133.9499823 127.3856115
Page 79
1994 13.964315 679.2977695 6.041757376 19.95083525 21.26640659 15.34921646 43.51886236 86.66580909 97.3492621 89.43065984 1995 13.080682 759.8536577 4.924291958 18.58250853 20.2250747 13.78185569 43.53851921 84.96258658 99.91742565 87.70415356 1996 10.92498 834.0792109 4.693460662 18.0037086 20.05385556 13.99842083 42.49166847 90.2562078 106.9105577 93.31957413 1997 10.008523 908.215362 4.643560064 17.2587556 21.75388803 14.2062477 42.44227892 97.63467261 116.3281248 100.7222848 1998 9.297034 983.1730051 4.291591697 16.0466548 20.34659897 14.64289946 41.40119769 106.1821995 125.0682567 113.1118575 1999 7.833347 1051.048329 3.577382952 17.52080373 20.16989305 15.29544922 39.39373957 111.4757965 134.9755902 119.3316012 2000 7.619836 1122.258646 3.20401361 20.91722011 23.32640567 15.78538568 37.52782349 112.3164551 137.0365783 119.6720796 2001 8.300318 1206.613169 3.339430035 20.48033944 22.60021221 15.9572958 38.38756506 111.2568326 142.6398122 123.0001183 2002 9.082068 1307.409549 3.391597337 22.56200572 25.13333351 15.59002808 40.43718152 118.850822 147.0632307 143.4562224 2003 10.025379 1429.550412 2.868854517 27.3574363 29.5560886 14.75135728 43.40161538 127.1511822 155.3589591 151.8770831 2004 10.08504 1564.401999 2.844026841 31.4003424 33.9517253 13.96943468 45.81452965 120.0918538 151.63163 140.3686783 2005 11.310035 1731.125235 4.612901518 31.55165415 37.08125479 14.27445418 47.62860984 113.283184 153.0314136 134.2979525 2006 12.676534 1939.710771 4.573692662 31.43326347 39.13380833 14.1129746 50.67229747 110.7348707 159.7690946 133.4805983 2007 14.162395 2202.885127 4.471861289 29.61397918 38.41398138 13.5060226 50.53773678 107.4916711 151.7782422 127.7825661 2008 9.634668 2402.782656 3.793480807 27.26426556 34.97950937 13.29492373 51.76151486 103.6922884 151.3050531 120.8037556 2009 9.214199 2611.160054 2.625732725 22.30300168 26.71271302 13.4027055 52.65313848 127.1869781 179.00249 145.0795512 2010 10.446989 2870.052933 4.109303153 26.69850849 30.6145489 13.2888416 52.13465262 129.9232477 180.7792393 146.2777834 2011 9.299885 3121.969728 3.008038634 27.30469293 31.37390004 13.09582517 52.5173189 127.0157226 180.0852794 145.48482 Indonesia 1990 9.001573222 840.2205453 0.955198331 23.73338032 25.32851283 8.843992387 32.26337943 48.08525556 40.477544 46.67317597 1991 8.927796145 899.358963 1.156294864 24.10210654 25.79723933 8.314884468 33.24909484 47.24581283 40.13003928 46.37210312 1992 7.220501604 947.9722826 1.277348796 24.95831167 27.89143662 8.757700637 33.41101228 45.52915004 42.49226805 46.57591113 1993 7.254075412 999.9621097 1.268299445 23.76855065 26.75478836 9.023303501 32.46466107 48.98141321 43.68509266 47.43642562 1994 7.540066679 1058.103376 1.192251901 25.36567353 26.51142763 8.114181459 32.20304745 51.93531238 55.9991379 50.28364454 1995 8.396358045 1129.060694 2.150079796 27.64642493 26.31216458 7.829063526 30.59387872 53.52639122 48.5857305 51.81533322 1996 7.642786284 1196.94413 2.724197983 26.4401913 25.82455238 7.566958693 30.0758595 55.46559393 52.69392905 54.02258569 1997 4.699872542 1234.702937 2.167798298 28.13463354 27.85926279 6.842809799 31.47589103 60.84894261 55.9991379 59.5505327 1998 -13.12672393 1057.089074 -0.252290447 43.21805888 52.96813536 5.693507972 26.52504027 53.23789018 59.86041365 59.92799813 1999 0.791129836 1050.159825 -1.332573529 27.42978425 35.5141287 6.604457128 19.45174559 20.59284264 58.38760965 62.07395825 2000 4.920064597 1086.050898 -2.75743993 30.45956744 40.97730855 6.531994973 32.76343803 19.90854065 53.88268121 60.67683381 2001 3.643466447 1109.521783 -1.855686195 30.76107226 39.03213345 6.88905937 30.81032751 20.29052708 50.99769446 54.46720326 2002 4.499475391 1142.902849 0.074151638 26.39184242 32.68762116 7.257458338 27.69984895 21.2766955 48.27886207 52.39332059 2003 4.780369122 1180.479734 -0.254256326 23.13883828 30.47765573 8.129486425 32.93731635 22.94974323 47.35285666 49.2041784 2004 5.030873945 1222.229512 0.738243957 27.54459896 32.2166932 8.321870961 28.72845983 26.39252469 44.8640218 49.6553251 2005 5.692571304 1273.465176 2.916114927 29.9206676 34.06726688 8.109509709 29.22800869 26.42785265 43.25444794 46.13807781 2006 5.500951785 1324.466828 1.347942602 25.6224105 31.03471631 8.627168802 30.81252311 24.60603404 41.32705609 41.62652751
2007 6.345022245 1388.606391 1.603010572 25.39353149 29.43571849 8.346469679 28.96247084 25.56383959 41.76270824 40.49717163 2008 6.013702503 1451.558317 1.826272063 28.75311546 29.80828417 8.42378092 28.87141328 26.47166067 38.39401166 36.77742169 2009 4.628872248 1498.007243 0.903919632 21.35300157 24.15911952 9.589178088 33.79131018 27.64794442 38.17200068 36.92338384 2010 6.223854181 1570.152937 1.944923551 22.94217176 24.62099329 9.041281242 34.2531943 29.05409142 38.37625979 36.51182612 2011 6.48563284 1650.555041 2.144407352 24.91521816 26.32738033 8.986567889 34.18226182 31.77558431 38.77698425 38.50769963 Thailand 1990 11.16715854 1571.573453 2.863204155 41.65043532 34.13192865 9.404614774 33.83525642 83.36905192 76.16468239 94.08295665 1991 8.558260592 1688.124355 2.050177479 42.50682437 35.96431007 9.220608485 36.29886424 89.09621705 79.21595061 96.2213166 1992 8.083393215 1809.498469 1.895890362 40.98217163 36.9724759 9.897969318 35.95424795 98.46947258 81.02340215 103.5589943 1993 8.251038454 1945.017641 1.443109362 42.19864914 37.95958114 9.982932641 35.77069981 111.3610102 86.22772438 116.0272416 1994 8.987181867 2104.542831 0.946891501 43.71485197 38.87168552 9.764500117 35.41034105 127.7479552 83.23699882 130.6755495 1995 9.237488252 2279.742078 1.230778589 48.58554921 41.84389244 9.89923622 35.35267511 139.8277309 84.96833024 141.324855 1996 5.901348116 2390.841701 1.28379658 45.5262464 39.25165463 10.18242908 35.54162811 147.1866805 85.33233634 146.3610363 1997 -1.371381565 2332.799823 2.581163535 46.59414027 48.00976809 10.07277187 35.07915983 165.7191272 99.39475704 177.5767071 1998 -10.50996915 2063.762459 6.53927007 42.98994577 58.87786233 11.06012927 36.334987 155.8962633 111.9139052 176.7461924 1999 4.447634198 2130.362241 4.976506993 45.72594111 58.29765213 11.49518923 33.07178926 131.924358 115.8993038 155.7846424 2000 4.75007039 2205.775392 2.742701804 58.14465588 66.77764842 11.33125088 31.46917839 108.2627936 114.5322017 138.2724752 2001 2.167264271 2227.650024 4.385778129 59.36637407 65.85660237 11.32008909 30.58855339 96.91347349 115.8217821 128.5696412 2002 5.317573751 2319.307074 2.633743034 57.50266528 64.1943345 11.07926166 30.49315466 102.5375373 113.2109973 127.7811425 2003 7.139975323 2458.298364 3.668162816 58.89901407 65.68064287 10.74805374 31.75007339 100.4968757 119.1982406 130.7487783 2004 6.344073496 2590.193117 3.632244669 65.84064723 70.69704858 11.10405524 31.64731636 101.9591204 114.7282915 124.5291403 2005 4.604698946 2689.953147 4.567770989 74.68707056 73.56771066 11.89428629 30.32291619 100.7288956 111.3723797 119.1806616 2006 5.092898713 2813.027203 4.565640269 70.15697636 73.64689515 11.80362269 31.78721976 95.20448218 108.8850835 108.9571171 2007 5.044316148 2946.295851 4.586229232 65.03647951 73.42447336 12.19056873 34.82186981 113.2382664 106.4484123 131.5805579 2008 2.484300401 3014.5447 3.132442358 73.88146159 76.44460097 12.3434414 31.6872394 113.047828 109.1005295 130.5003066 2009 -2.329848588 2940.223579 1.840634863 57.80563534 68.35167993 13.42610355 31.78693567 116.4218299 116.9891929 137.0140057 2010 7.810512395 3163.903845 2.854740523 63.85577736 71.28576548 12.96437611 33.36506406 123.8835827 116.1260292 142.8089434 2011 0.077086894 3158.066671 2.250689268 72.40697319 76.94351893 13.25912934 31.16304783 140.3768191 128.2139319 159.2112971 Philippines 1990 3.036966293 1002.436121 1.196075197 33.28404056 27.51622902 10.10390471 18.38332697 19.26626174 34.24655856 23.23291903 1991 -0.578334652 972.6514309 1.197776048 32.58769354 29.59725515 9.926595198 17.22789302 17.83868091 34.79742566 19.54009219 1992 0.337603032 953.1111666 0.43038062 34.02818523 29.12976792 9.657292061 16.43997783 20.64852515 36.34373342 21.22141912 1993 2.11630718 951.0327393 2.277067049 39.80685771 31.35961239 10.10928091 15.53412544 26.41413076 42.69103812 45.4154309 1994 4.387623339 970.3857416 2.48265794 40.13386244 33.82569412 10.7964171 17.75464106 29.09331267 47.12215257 48.04782472 1995 4.678692221 993.0838848 1.994067226 44.18125125 36.35728306 11.38775341 14.62655651 37.53186729 51.84818497 55.74031022 1996 5.845873472 1027.834372 1.831059821 49.29329875 40.50665724 11.94798892 15.22918411 48.97984366 56.29649684 67.92136182 1997 5.185362275 1057.420252 1.484011517 59.2938354 48.956482 13.18371991 14.43840571 56.45748231 62.02787028 78.54342219
1998 -0.576722189 1028.538041 3.167281965 53.89801488 44.7642293 13.27885566 14.25257743 43.32174591 55.34486237 63.27797752 1999 3.081926764 1037.574629 1.502497515 49.42015002 45.48930623 12.21889072 15.02737355 38.51754017 58.87715267 58.93050948 2000 4.411212508 1060.550031 2.76453466 53.36056603 51.36929375 11.42367387 16.37632628 36.76903418 57.67578558 58.33520711 2001 2.89399241 1068.592392 0.255697469 52.88208903 46.02685204 11.08033671 15.28619217 37.52963629 58.40951554 56.05629573 2002 3.64589814 1084.897352 1.895334799 55.68807513 46.74700517 10.57376128 15.52939558 34.88447546 59.49216836 55.08946178 2003 4.970363732 1116.058959 0.58516327 54.69227826 47.15705518 10.20248185 15.4452659 33.14049065 57.27546606 54.33711109 2004 6.697636426 1167.812024 0.752972186 54.06987225 48.57264858 9.382408789 16.11437214 32.24141444 56.32881392 53.98101913 2005 4.777663461 1200.938178 1.614499879 51.74156444 46.13698479 9.039750944 15.94582637 29.07347218 54.27557882 47.2466637 2006 5.24295304 1241.546615 2.21502665 48.362769 46.57805687 9.180396073 16.22434015 28.69398668 60.66480634 48.24825747 2007 6.616668504 1301.22125 2.17260427 43.35861064 43.26079826 9.284945613 17.23953223 28.86413779 60.4960431 48.34577375 2008 4.152757146 1332.826879 0.827176869 39.37022604 36.91204053 8.831776358 16.82987282 29.0649782 59.42929233 47.44272861 2009 1.148330409 1325.902811 1.611087127 33.35803115 32.23235348 9.860312246 15.46588235 29.16279952 62.10799309 48.71485001 2010 7.632263915 1403.306336 0.819181586 36.61619832 34.80329295 9.721701887 18.7278189 29.5785341 61.39922093 49.23166061 2011 3.638680736 1429.747858 0.831514415 36.02216765 31.01778444 9.569929488 16.70986306 31.77931898 59.79600124 51.83496952 Vietnam 1990 5.10091814 301.3123991 2.781322897 45.2770865 36.03861539 12.33941203 3.327377107
1991 5.960843932 313.4534235 3.902796786 36.03191295 30.91503925 8.087918997 9.953458812
1992 8.64604746 334.5461741 4.803347843 38.83128988 34.74559633 5.763941682 13.55444354 13.65691042 22.50752847 15.71206732 1993 8.072730657 355.352565 7.027592343 37.48948344 28.72278187 7.328636798 15.48860085 16.52946381 20.07455348 22.46297546 1994 8.838980952 380.3183052 11.93948242 43.46006787 34.01312753 8.255009935 16.02888285
1995 9.540480175 409.8264975 8.58596608 41.90841167 32.81285618 8.187704289 18.04868335 18.48467272 19.5664895 20.07219658 1996 9.340017496 440.9917033 9.713080733 51.83725984 40.86848779 8.352571129 17.13412855 18.67003612 20.71006209 20.12065664 1997 8.152084143 469.5591148 8.270096544 51.24177597 43.10270562 8.130781322 20.16050962 19.8488406 22.50730946 21.2420477 1998 5.764455464 489.0616971 6.141214415 52.15294524 44.84830347 7.623740664 21.74523766 20.12386318 24.20792904 21.97314868 1999 4.773586881 504.77857 4.922663629 52.82116249 49.96624773 6.785234118 24.77484337 28.18658805 36.37276008 28.9247201 2000 6.787316408 531.8583967 4.163924231 57.49559948 55.03253818 6.41826278 27.1468544 35.25907528 44.60459442 35.14941958 2001 6.192893312 557.683161 3.977335384 56.89400374 54.61224311 6.329381926 28.89101499 39.29039295 52.11890747 39.72704822 2002 6.320820988 586.0921813 3.993357785 61.96814328 56.80005546 6.233291986 28.04122525 43.13802005 53.04445511 44.78884365 2003 6.899063492 619.2884078 3.66601231 67.65469672 59.29401771 6.320065402 27.08417753 48.37235095 61.6291654 51.80114549 2004 7.536410612 658.0340299 3.544081073 73.28545645 65.73625031 6.395994764 27.91109242 58.72243079 69.26358598 61.92837733 2005 7.547247727 699.4878933 3.692554455 73.54014664 69.35907656 6.154828762 31.39317764 65.85555301 77.28375045 71.22348086 2006 6.977954812 740.0391089 3.940012276 78.16622976 73.60505242 6.028538407 31.6678402 71.21607713 86.3224955 75.37893573 2007 7.129504484 784.2519938 9.434547724 92.74714417 76.8951181 6.05456779 27.27934844 93.55477545 109.292962 96.17780653 2008 5.661771208 819.8814823 10.51550551 93.12933406 77.92245047 6.121324842 24.50563555 90.23338123 101.6808997 94.27368189 2009 5.397897543 855.0700477 7.820514676 78.65164406 68.30046008 6.303704195 27.77772418 112.759966 115.1719439 123.010872 2010 6.423238217 900.4936927 7.516900448 87.80608345 77.53067523 6.52794619 28.60618886 125.1947333 125.1947333 135.7959003
2011 6.240302749 946.8034178 6.011319984 91.23091525 87.01582007 6.482149169 30.79150046 111.6367286 109.2698721 120.7096782 Singapore 1990 10.04421048 16553.52037 15.44550112 167.381156 177.4485514 9.539483965 45.1175299 79.27905146 87.85974264 58.69675781 1991 6.687076218 17164.7503 11.34785428 156.3045901 169.5908223 9.430174612 46.67636019 80.36613331 89.08902241 60.2787635 1992 7.087600945 17837.39566 4.494688567 149.931484 162.0991281 8.92065714 46.80571309 81.2726395 89.38125482 58.57087721 1993 11.53738744 19398.20614 7.812606311 152.0936549 161.9999202 9.111377427 46.37674633 81.14671806 84.05322177 56.88457598 1994 10.92545611 20853.58217 12.35027178 150.9528688 167.2232443 8.211352897 48.57619464 81.69336916 84.01408161 56.05021178 1995 7.02804585 21651.09419 14.27826652 166.2485677 183.0106694 8.391747799 50.03038903 89.05443931 82.63222469 59.67432686 1996 7.531933911 22354.54985 10.22523985 161.8410582 178.4887741 9.288073105 50.90061964 94.83814627 83.41628939 64.35403062 1997 8.291117708 23408.92409 13.1527181 156.8386176 171.5721112 9.08404014 51.92467214 97.27440135 83.72746048 70.03130182 1998 -2.225229743 22123.37812 7.632635502 147.3218999 169.0347285 9.897166184 51.74064034 108.8389569 113.0068507 85.80449134 1999 6.095204493 23285.0741 19.28485241 162.9206376 180.1579783 9.937658088 48.50213286 104.4096703 121.2737518 83.7817192 2000 8.897544418 24921.23855 17.18515583 179.486678 192.3375656 10.88630438 46.03432931 97.85335712 105.1135997 77.89199559 2001 -0.952290066 24027.14972 16.55180546 172.2585071 187.828513 12.09429278 42.34042973 117.7686095 115.1288596 92.03804855 2002 4.211686552 24811.25175 7.067536813 171.2986793 188.7558495 12.2566613 41.23050287 104.1606413 111.0960293 74.74422287 2003 4.435328147 26297.10073 12.79024296 179.542692 207.4226255 11.82965054 43.99667412 106.6280044 116.5422853 80.1566033 2004 9.549175476 28449.42425 19.23057537 193.6065038 219.2672673 10.86105829 47.40797399 97.71345865 108.6588284 72.38463873 2005 7.489157459 29869.63276 14.64722304 200.2733713 229.6753698 10.49243714 49.37673551 90.91551836 105.2853058 62.13086854 2006 8.860196114 31514.37121 26.37925776 203.9819398 233.4045684 10.30902416 50.57336409 85.95335706 113.2951983 62.42491815 2007 9.111527148 32982.98209 27.86247387 186.9984127 217.699372 9.543123651 53.00784216 86.96777347 111.1826235 69.52715387 2008 1.787620228 31832.70615 7.073330819 219.0691161 241.4020145 9.988383842 51.24638984 106.6503298 132.635197 82.28257497 2009 -0.603388298 30700.47142 13.87874878 196.7745927 224.7920142 10.45019268 51.33818808 109.8910776 149.1329036 97.1551702 2010 15.24037704 34758.40433 22.81759734 178.7489098 207.1705359 10.52523442 50.54964443 100.0423498 130.0156949 83.96216191 2011 6.056872247 36102.75023 26.70152725 182.2820504 208.9502448 10.32321153 49.10813616 112.564146 135.6531054 93.58952784
APPENDIX C: REGRESSION RESULTS C.1. Declare data to be panel
. Xtset countrycode year
panel variable: countrycode (strongly balanced) time variable: year, 1990 to 2011
delta: 1 unit
. sort country year
. by country: gen GDPGRTHLAG1= gdpgrth[_n-1]
. by country: gen DOMCREDITLAG1 = domcreditgdp[_n-1]
. by country: gen EG= gdpgrth
C.2 Regression results on the impact of Economic growth on financial development
C.2.1 Testing for regressor endogeneity
. ivregress 2sls fd (EG = fdi gov trao GDPGRTHLAG1) m2gdp bankcreditgdp DOMCREDITLAG1 grossdsa, robust
Instrumental variables (2SLS) regression Number of obs = 456 Wald chi2(5) =68992.57 Prob > chi2 = 0.0000 R-squared = 0.9950
Root MSE = 8.015
---
| Robust
fd | Coef. Std. Err. z P>|z| [95% Conf. Interval]
---+ ---
EG | 1.213075 .4923588 2.46 0.014 .2480697 2.178081 m2gdp | .986736 .0517581 19.06 0.000 .8852919 1.08818 bankcreditgdp | 1.243086 .0493973 25.17 0.000 1.146269 1.339902 DOMCREDITLAG1 | .7242191 .0684706 10.58 0.000 .5900192 .858419 grossdsa | 1.107113 .0762243 14.52 0.000 .9577161 1.25651 _cons | -7.619407 1.755328 -4.34 0.000 -11.05979 -4.179027 ---
Instrumented: EG
Instruments: m2gdp bankcreditgdp DOMCREDITLAG1 grossdsa fdi gov trao GDPGRTHLAG1
. estat endogenous
Tests of endogeneity
Ho: variables are exogenous
Robust score chi2(1) = 6.15632 (p = 0.0131)
Robust regression F(1,449) = 7.24548 (p = 0.0074)
C.2.2 Testing for overidentifation
. ivregress 2sls fd (EG = fdi gov GDPGRTHLAG1) m2gdp bankcreditgdp DOMCREDITLAG1 grossdsa, robust
Instrumental variables (2SLS) regression Number of obs = 456 Wald chi2(5) =36762.73 Prob > chi2 = 0.0000 R-squared = 0.9913 Root MSE = 10.537 ---
| Robust
fd | Coef. Std. Err. z P>|z| [95% Conf. Interval]
---+---
EG | 2.481783 .6477292 3.83 0.000 1.212257 3.751308 m2gdp | .9195533 .0621771 14.79 0.000 .7976885 1.041418 bankcreditgdp | 1.287596 .0588551 21.88 0.000 1.172242 1.40295 DOMCREDITLAG1 | .7440606 .0750161 9.92 0.000 .5970318 .8910893 grossdsa | .9914662 .087724 11.30 0.000 .8195303 1.163402 _cons | -10.48041 2.327741 -4.50 0.000 -15.0427 -5.91812 --- Instrumented: EG
Instruments: m2gdp bankcreditgdp DOMCREDITLAG1 grossdsa fdi gov GDPGRTHLAG1
. estat overid
Test of overidentifying restrictions:
Score chi2(2) = 4.07701 (p = 0.1302)
C.2.3 Testing for weak instruments
reg fd fdi gov trao GDPGRTHLAG1 m2gdp bankcreditgdp DOMCREDITLAG1 grossdsa , robust
Linear regression Number of obs = 456
F( 8, 447) =16438.58 Prob > F = 0.0000
R-squared = 0.9966
Root MSE = 6.6784
---
| Robust
fd | Coef. Std. Err. t P>|t| [95% Conf. Interval]
---+ ---
fdi | .2943362 .0949583 3.10 0.002 .107716 .4809564
gov | -.0059817 .108874 -0.05 0.956 -.2199503 .2079868 trao | .0297118 .0080789 3.68 0.000 .0138345 .0455891 GDPGRTHLAG1 | .6251163 .1304802 4.79 0.000 .3686855 .8815471 m2gdp | .951685 .0342987 27.75 0.000 .8842783 1.019092 bankcreditgdp | 1.312666 .0531455 24.70 0.000 1.20822 1.417112 DOMCREDITLAG1 | .6498787 .0669155 9.71 0.000 .5183707 .7813868 grossdsa | 1.121969 .0536756 20.90 0.000 1.016481 1.227457 _cons | -7.302614 2.127787 -3.43 0.001 -11.48432 -3.120906 ---
.
. test fdi gov trao GDPGRTHLAG1 m2gdp bankcreditgdp DOMCREDITLAG1 grossdsa ( 1) fdi = 0
( 2) gov = 0 ( 3) trao = 0
( 4) GDPGRTHLAG1 = 0 ( 5) m2gdp = 0
( 6) bankcreditgdp = 0 ( 7) DOMCREDITLAG1 = 0 ( 8) grossdsa = 0
F( 8, 447) =16438.58
Prob > F = 0.0000
C.2.4 Estimation Results
. ivreg fd m2gdp bankcreditgdp DOMCREDITLAG1 grossdsa (EG = GDPGRTHLAG1 fdi gov trao),robust
Instrumental variables (2SLS) regression Number of obs = 456 F( 5, 450) =13616.95 Prob > F = 0.0000 R-squared = 0.9950 Root MSE = 8.0682 ---
| Robust
fd | Coef. Std. Err. t P>|t| [95% Conf. Interval]
---+ ---
EG | 1.213075 .4956303 2.45 0.015 .2390379 2.187113 m2gdp | .986736 .052102 18.94 0.000 .8843425 1.089129 bankcreditgdp | 1.243086 .0497255 25.00 0.000 1.145363 1.340809
DOMCREDITLAG1 | .7242191 .0689256 10.51 0.000 .5887631 .859675 grossdsa | 1.107113 .0767307 14.43 0.000 .9563178 1.257908 _cons | -7.619407 1.766992 -4.31 0.000 -11.09199 -4.146827 ---
Instrumented: EG
Instruments: m2gdp bankcreditgdp DOMCREDITLAG1 grossdsa GDPGRTHLAG1 fdi gov Trao
---
C.3 Regression result on the impact of financial development on economic growth C.3.1 Testing for regressor endogeneity
ivregress 2sls EG (fd = m2gdp bankcreditgdp DOMCREDITLAG1 grossdsa) GDPGRTHLAG1 fdi gov trao, robust
Instrumental variables (2SLS) regression Number of obs = 456 Wald chi2(5) = 83.12 Prob > chi2 = 0.0000 R-squared = 0.1869 Root MSE = 3.2614 ---
| Robust
EG | Coef. Std. Err. z P>|z| [95% Conf. Interval]
---+ ---
fd | .0040811 .0020319 2.01 0.045 .0000987 .0080636 GDPGRTHLAG1 | .3093671 .0550719 5.62 0.000 .2014282 .417306 fdi | .1554224 .0507777 3.06 0.002 .0558999 .2549449 gov | -.075449 .0440829 -1.71 0.087 -.1618499 .010952 trao | -.0049284 .0034018 -1.45 0.147 -.0115959 .0017391 _cons | 3.205008 .6247136 5.13 0.000 1.980592 4.429424 ---
Instrumented: fd
Instruments: GDPGRTHLAG1 fdi gov trao m2gdp bankcreditgdp DOMCREDITLAG1 Grossdsa
.
. estat endogenous Tests of endogeneity
Ho: variables are exogenous
Robust score chi2(1) = .115595 (p = 0.7339) Robust regression F(1,449) = .113956 (p = 0.7358)
C.3.2 Testing for regressor correlation
. correlate domcreditgdp m2gdp grossdsa bankcreditgdp (obs=480)
DOMCREDITGDP M2GDP GROSSDSA BANKCREDITGDP
DOMCREDITGDP 1.0000
M2GDP 0.8721 1.0000
GROSSDSA 0.6280 0.4844 1.0000
BANKCREDITGDP 0.9039 0.8747 0.4597 1.0000
C.3.3 Testing for Multicollinearity:
. regress EG DOMCREDITLAG1 grossdsa m2gdp bankcreditgdp GDPGRTHLAG1 import export gov fdi
Source | SS df MS Number of obs =
Model | 2053.15614 9 228.12846 Prob > F = 0.0000
Residual | 3911.87494 446 8.77102005 R-squared = 0.3442
---+ --- Adj R-squared = 0.3310
Total | 5965.03108 455 13.1099584 Root MSE = 2.9616
---
EG | Coef. Std. Err. t P>|t| [95% Conf. Interval]
---+ ---
DOMCREDITLAG1 | -.0177692 .0117607 -1.51 0.132 -.0408823 .005344
grossdsa | .2793218 .030177 9.26 0.000 .220015 .3386286
m2gdp | .0361335 .0099299 3.64 0.000 .0166183 .0556487
bankcreditgdp | -.032633 .0111958 -2.91 0.004 -.0546361 -.0106299 GDPGRTHLAG1 | .0699924 .0453035 1.54 0.123 -.0190425 .1590273
import | .2211401 .029143 7.59 0.000 .1638654 .2784147
export | -.2367382 .0279527 -8.47 0.000 -.2916737 -.1818028
gov | .0332015 .0458072 0.72 0.469 -.0568232 .1232263
fdi | .1188958 .0419837 2.83 0.005 .0363853 .2014063
_cons | -1.781428 .8420761 -2.12 0.035 -3.436358 -.1264984 ---
. vif
Variable | VIF 1/VIF
---+ ---
export | 63.67 0.015707
import | 55.24 0.018104
bankcredit~p | 9.25 0.108144
DOMCREDITL~1 | 8.96 0.111591
m2gdp | 6.95 0.143946
grossdsa | 6.71 0.149062
fdi | 1.78 0.560986
gov | 1.62 0.616930
GDPGRTHLAG1 | 1.52 0.657963
---+ ---
Mean VIF |
.correlate DOMCREDITLAG1 grossdsa m2gdp bankcreditgdp GDPGRTHLAG1 import export gov fdi
(obs=456)
DOMCREDITLAG1 Grossdsa m2gdp DOMCREDITLAG1 GDPGRTHLAG1 import export gov
DOMCREDITLAG1 1
grossdsa 0.621 1
m2gdp 0.8658 0.494 1
DOMCREDITLAG1 0.8882 0.4644 0.8769 1
GDPGRTHLAG1 0.1932 0.3022 0.2588 0.1474 1
import 0.5022 0.4298 0.5022 0.2871 0.1642 1
export 0.5384 0.5829 0.5039 0.3128 0.1394 0.9715 1
gov 0.1476 -0.3595 0.2286 0.2333 -0.0673 0.0348- -0.126 1
fdi 0.3551 0.261 0.37 0.1803 0.2231 0.6257 0.5929 0.0828
C.3.4 Estimation Results
C.3.4.1 We obtain the estimations with IMPORT and EXPORT variables C.3.4.1.1 Impact of Domcreditlag1 on economic growth
regress EG DOMCREDITLAG1 import export gov fdi, robust cluster()
Linear regression Number of obs =
F( 5, 451) =
Prob > F = 0.0000
R-squared = 0.0983
Root MSE = 3.4586
---
| Robust
EG | Coef. Std. Err. t P>|t| [95% Conf. Interval]
---+ ---
DOMCREDITLAG1 | .0215886 .0079229 2.72 0.007 .0060182 .037159 import | .0557593 .0229201 2.43 0.015 .0107159 .1008028 export | -.0627588 .0194501 -3.23 0.001 -.1009828 -.0245347 gov | -.1669427 .0416902 -4.00 0.000 -.2488739 -.0850115
fdi | .1988553 .0528865 3.76 0.000 .0949207 .30279
_cons | 5.128257 .563125 9.11 0.000 4.021582 6.234931 ---
C.3.4.1.2 Impact of Bankreditgdp on economic growth
regress EG bankcreditgdp import export gov fdi, robust cluster()
Linear regression Number of obs =
F( 5, 473) =
Prob > F = 0.0000
R-squared = 0.0952
Root MSE = 3.5668
---
| Robust
EG | Coef. Std. Err. t P>|t| [95% Conf. Interval]
---+ ---
bankcreditgdp | .012735 .0060182 2.12 0.035 .0009093 .0245608 import | .0588954 .0232444 2.53 0.012 .0132203 .1045705 export | -.0599913 .0196989 -3.05 0.002 -.0986995 -.0212831 gov | -.1857124 .0419999 -4.42 0.000 -.2682419 -.1031829 fdi | .2261025 .0548844 4.12 0.000 .1182552 .3339499 _cons | 5.280728 .5766067 9.16 0.000 4.147701 6.413756 ---
C.3.4.1.3 Impact of M2gdp on economic growth
regress EG m2gdp import export gov fdi, robust cluster()
Linear regression Number of obs = 479
F( 5, 473) = 15.63 Prob > F = 0.0000 R-squared = 0.1288
Root MSE = 3.4998
---
| Robust
EG | Coef. Std. Err. t P>|t| [95% Conf. Interval]
---+ ---
m2gdp | .0272368 .0054749 4.97 0.000 .0164787 .0379949 import | .0556597 .0235526 2.36 0.019 .009379 .1019404 export | -.0655778 .0203839 -3.22 0.001 -.1056319 -.0255237 gov | -.2230461 .0427007 -5.22 0.000 -.3069526 -.1391396 fdi | .2100303 .0535808 3.92 0.000 .1047445 .3153161 _cons | 5.292785 .5731737 9.23 0.000 4.166503 6.419067 ---
C.3.4.1.4 Impact of Grossdsa on economic growth
regress EG grossdsa import export gov fdi, robust cluster()
Linear regression Number of obs = 483
F( 5, 477) = 42.90
Prob > F = 0.0000
R-squared = 0.2792
Root MSE = 3.2194
---
| Robust
EG | Coef. Std. Err. t P>|t| [95% Conf. Interval]
--- + ---
grossdsa | .2442982 .0198374 12.32 0.000 .2053188 .2832777 import | .2429625 .0290806 8.35 0.000 .1858206 .3001045
export | -.2552888 .0281521 -9.07 0.000 -.3106062 -.1999714 gov | -.0903438 .0419474 -2.15 0.032 -.1727683 -.0079193
fdi | .1884616 .0531684 3.54 0.000 .0839883 .2929349
_cons | -.2455744 .7867414 -0.31 0.755 -1.791482 1.300333 ---
C.3.4.2 We obtain the estimations without IMPORT and EXPORT variables C.3.4.2.1 Impact of Domcreditlag1 on economic growth
regress EG DOMCREDITLAG1 gov fdi, robust cluster()
Linear regression Number of obs = 457
F( 3, 453) = 11.61 Prob > F = 0.0000 R-squared = 0.0742
Root MSE = 3.4966
---
| Robust
EG | Coef. Std. Err. t P>|t| [95% Conf. Interval]
---+---
DOMCREDITLAG1 | .0118288 .0069407 1.70 0.089 -.0018112 .0254689 gov | -.0878939 .0431353 -2.04 0.042 -.1726639 -.0031238 fdi | .1673948 .0379484 4.41 0.000 .0928182 .2419715 _cons | 4.532995 .5437234 8.34 0.000 3.464462 5.601529
C.3.4.2.2 Impact of Bankreditgdp on economic growth
. regress EG bankcreditgdp gov fdi, robust cluster()
Linear regression Number of obs = 479
F( 3, 475) = 12.65 Prob > F = 0.0000 R-squared = 0.0762 Root MSE = 3.5964
---
| Robust
EG | Coef. Std. Err. t P>|t| [95% Conf. Interval]
---+---
bankcreditgdp | .0076401 .0060274 1.27 0.206 -.0042036 .0194838
gov | -.1145634 .0441579 -2.59 0.010 -.2013323 -.0277945 fdi | .2049703 .0370357 5.53 0.000 .1321962 .2777444 _cons | 4.842479 .5610337 8.63 0.000 3.740064 5.944893
C.3.4.2.3 Impact of M2gdp on economic growth
. regress EG m2gdp gov fdi, robust cluster()
Linear regression Number of obs = 479
F( 3, 475) = 15.92 Prob > F = 0.0000 R-squared = 0.0986 Root MSE = 3.5526
---
| Robust
EG | Coef. Std. Err. t P>|t| [95% Conf. Interval]
---+ ---
m2gdp | .018739 .005448 3.44 0.001 .0080339 .0294442 gov | -.135211 .0430518 -3.14 0.002 -.2198065 -.0506155 fdi | .1598157 .0377254 4.24 0.000 .0856864 .233945 _cons | 4.57462 .5557799 8.23 0.000 3.482529 5.666711 ---
C.3.4.2.4 Impact of Grossdsa on economic growth
. regress EG grossdsa gov fdi, robust cluster()
Linear regression Number of obs = 483
F( 3, 479) = 16.56 Prob > F = 0.0000 R-squared = 0.1146
Root MSE = 3.5605
---
| Robust
EG | Coef. Std. Err. t P>|t| [95% Conf. Interval]
--- + ---
grossdsa | .0700373 .0173748 4.03 0.000 .035897 .1041775 gov | -.0310961 .0479203 -0.65 0.517 -.125256 .0630639
fdi | .1686506 .0380042 4.44 0.000 .0939749 .2433262 _cons | 2.843549 .7679072 3.70 0.000 1.334666 4.352432
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