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Financing the economy: The multidimensional influences of financial development on economic complexity
Author(s) -
Nguyen Canh Phuc,
Su Thanh Dinh
Publication year - 2021
Publication title -
journal of international development
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.533
H-Index - 66
eISSN - 1099-1328
pISSN - 0954-1748
DOI - 10.1002/jid.3541
Subject(s) - finance , indirect finance , economics , financial market , sample (material) , financial econometrics , financial intermediary , financial analysis , geography of finance , financial ratio , index (typography) , financial system , business , chemistry , chromatography , world wide web , computer science
This study examines how financial development influences economic complexity, using a broad index of financial development. By utilising a global sample of 86 countries over the period 2002–2017 and applying several econometric techniques, we find that financial institutions and financial markets, as well as their sub‐indices (financial depth, financial access and financial efficiency), have significantly positive impacts on economic complexity. Interestingly, financial institutions have a stronger effect than financial markets, and it is the same with financial efficiency over financial access and financial depth. Three subsamples comprising 28 low‐ and lower‐middle‐income countries, 22 upper‐middle‐income countries and 36 high‐income countries are examined.