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ID099156
Title ProperFinancial intermediation development and economic growth
Other Title Informationdoes the Chinese counterexample exist?
LanguageENG
AuthorYao, Yaojun
Publication2010.
Summary / Abstract (Note)In terms of the degree-of-freedom of bank loan decision-making, the ratio of loans of private enterprises and individuals to total loans is used to measure the development of China's financial intermediation. Applying generalized method of moments estimation developed for dynamic panel data models, the present paper finds that the effect of financial intermediation development on economic growth is positive and statistically significant when controlling for other variables, such as human capital, foreign direct investment, securitization and foreign trade. The empirical results indicate that the concept of the so-called Chinese counterexample in financial development is questionable. Financial system reforms, including encouraging banks to operate independently, reducing or eliminating mandatory loans, and making financial decision-making more market-oriented, are important for China's economic growth.
`In' analytical NoteChina and World Economy Vol. 18, No. 5; Sep-Oct 2010: p.22-36
Journal SourceChina and World Economy Vol. 18, No. 5; Sep-Oct 2010: p.22-36
Key WordsEconomic Growth ;  Financial Intermediation ;  Generalized Method of Moments - System Estimation