The browser you are using is not supported by this website. All versions of Internet Explorer are no longer supported, either by us or Microsoft (read more here: https://www.microsoft.com/en-us/microsoft-365/windows/end-of-ie-support).

Please use a modern browser to fully experience our website, such as the newest versions of Edge, Chrome, Firefox or Safari etc.

Lending for Growth? A Granger Causality Analysis of China's Finance-Growth Nexus

På svenska

Author

Summary, in English

China’s banking sector is dominated by four distinct organizational forms: policy banks (PBs), state-owned commercial banks (SOCBs), joint stock commercial banks (JSCBs), and rural credit cooperatives (RCCs). Economic analyses have especially focused on the development of bank efficiency and profitability over time. The equally important question, which of China’s banking institutions promote economic growth, has not been explored using macroeconomic data. Our study uses a novel data set covering the period 1997 to 2008 and employ Granger causality tests to estimate the finance-growth nexus of each of these bank types. Our results show that SOCBs and RCCs do not Granger-cause GDP growth and that SOCBs even have a negative effect on manufacturing growth. By contrast, PBs and JSCBs promote economic growth.

Publishing year

2016-11

Language

English

Pages

897-920

Publication/Series

Empirical Economics

Volume

51

Issue

3

Document type

Journal article

Publisher

Physica Verlag

Topic

  • Economics

Keywords

  • China
  • Economic growth
  • Government-owned banks
  • Banking sector

Status

Published

ISBN/ISSN/Other

  • ISSN: 0377-7332