## Financial Development and Economic Growth: An Overview

_IMF Working Papers, December 1, 2000_

## Source details

**Canonical URL:** [Financial Development and Economic Growth: An Overview](https://www.imf.org/en/publications/wp/issues/2016/12/30/financial-development-and-economic-growth-an-overview-3926)

## Other formats

- [Markdown version](/en/publications/wp/issues/2016/12/30/financial-development-and-economic-growth-an-overview-3926/index.md)
- [Structured JSON version](/en/publications/wp/issues/2016/12/30/financial-development-and-economic-growth-an-overview-3926/index.json)
- [Bundle manifest](/en/publications/wp/issues/2016/12/30/financial-development-and-economic-growth-an-overview-3926/bundle-manifest.json)

## Bibliographic details
- Authors: Mohsin S. Khan, Abdelhak S Senhadji
- Published: December 1, 2000
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781451874747.001

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### Summary
- The paper provides a selective review of theoretical and empirical literature on the role of financial markets in fostering economic growth and development.
- It presents new empirical evidence on the relationship between financial development and economic growth for a large cross-section sample of countries.
- The results indicate that the effect of financial development on growth is positive, but the size of the effect varies with different indicators of financial development, estimation method, data frequency, and the functional form of the relationship.

### Key Findings and Evidence
- Effect on growth:
  - The effect of financial development on growth is positive.
  - The magnitude of the effect varies with:
    - different indicators of financial development;
    - estimation method;
    - data frequency;
    - the functional form of the relationship.
- Scope of analysis:
  - Empirical evidence covers a large cross-section sample of countries.
- Research type:
  - Selective literature review combined with new empirical analysis.

### Subjects and Keywords (as listed in the source)
- Subjects:
  - Economic and financial statistics
  - Financial markets
  - Financial sector development
  - Financial statistics
  - Market capitalization
  - Securities markets
  - Stock markets
- Keywords:
  - bond market capitalization
  - financial development
  - financial markets
  - Financial sector development
  - Financial statistics
  - growth
  - Market capitalization
  - market condition
  - market imperfection
  - market securities
  - Securities markets
  - security market indicator
  - Stock markets
  - Sub-Saharan Africa
  - time variation
  - WP

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## Content in this bundle

- **Financial Development and Economic Growth: An Overview - WP/00/209**
  - [Financial Development and Economic Growth: An Overview - WP/00/209 (Markdown version)](/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/2000/_wp00209.pdf.md){rel="alternate" type="text/markdown"}
  - [Financial Development and Economic Growth: An Overview - WP/00/209 (PDF)](/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/2000/_wp00209.pdf){rel="external" type="application/pdf"}

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_Source: https://www.imf.org/en/publications/wp/issues/2016/12/30/financial-development-and-economic-growth-an-overview-3926_