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N° 2006-21 |
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| December 2006 |
| Are Financial Distortions an Impediment to Economic Growth? Evidence from China |
Alessandra Guariglia
Sandra Poncet |
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| Using data for 30 Chinese provinces over the period 1989-2003, this study examines the
relationship between the level of financial intermediary development, and real GDP growth,
physical capital accumulation, and total factor productivity (TFP) growth. We find that
traditionally used indicators of financial development and China-specific indicators
measuring the level of state interventionism in finance are generally negatively associated
with growth and its sources, while indicators measuring the degree of market driven
financing in the economy are positively associated with GDP and TFP growth, and capital
accumulation. These effects have gradually declined over time and are weaker for high FDI
recipients. |
Abstract |
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| Financial intermediation; economic growth; capital accumulation;
productivity growth; China |
Keywords |
| E44; G21; N15; O16; O40 |
JEL classification |
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