Lending for Growth? A Granger Causality Analysis of China's Finance-Growth Nexus
SourceEmpirical Economics, 51, 3, (2016), pp. 897-920
12 januari 2016
Article / Letter to editor
Display more detailsDisplay less details
SubjectInstitute for Management Research
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 1997–2008 and employs 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.
Upload full text
Use your RU credentials (u/z-number and password) to log in with SURFconext to upload a file for processing by the repository team.