Advances in Economics and Business Vol. 5(8), pp. 456 - 465
DOI: 10.13189/aeb.2017.050804
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Revisiting the Effect of Financial Development on Economic Growth after the 2008 Global Financial Crisis


Sinem Celik Girgin , Hong-Oanh Nguyen *, Thanasis Karlis
Department of Maritime and Logistics Management, Australian Maritime College, University of Tasmania, Australia

ABSTRACT

A growing body of theoretical and empirical literature analyses the relationship between finance and economic growth. The relationship has been strongly supported by many empirical analyses. However, the 2008 Global Financial Crisis (GFC) and the significantly improved econometric techniques made scholars to revisit this relationship. The main motivation of this paper is to empirically revisit the relationship between financial development and economic growth, especially one under the effect of the world's greatest financial crisis since the Great Depression. In this study, both fixed effect and dynamic panel data analysis are conducted by using 147 countries over the period of 2000-2013. The analysis results prove the destructive effect of the GFC on the relationship between financial development and economic growth. Also, the finding showed that the effect of traditional financial development proxies has reduced after the crisis.

KEYWORDS
Economic Growth, Financial Development, Global Financial Crisis, Panel Data

Cite this paper
Sinem Celik Girgin , Hong-Oanh Nguyen , Thanasis Karlis . "Revisiting the Effect of Financial Development on Economic Growth after the 2008 Global Financial Crisis." Advances in Economics and Business 5.8 (2017) 456 - 465. doi: 10.13189/aeb.2017.050804.