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This paper surveys the literature, particularly the empirical literature, that examines the association between financial structure and economic growth. The studies are divided into two groups depending on their research focus and research design. Whereas both strands of literature contribute to our understanding of the relationship between financial structure and growth and may also inform each other, the fundamental difference in their research questions means that they should be treated separately rather than together. Despite this difference, the two strands of literature share a common weakness: i.e. they overlook the interactions between banks and stock markets, which may lead to biased estimations.

Reassessing the Literature on the Relationship Between Financial Structure and Economic Growth