THE IMPACT OF FINANCIAL DEVELOPMENT ON THE ECONOMIC GROWTH IN ASIA COUNTRIES

Abstract

In recent years, the topic of the relationship between financial development and economic growth has continued to receive considerable attention from researchers. However, empirical findings in this field remain inconsistent, indicating the existence of diverse effects. This study applies the System Generalized Method of Moments (SGMM) estimation technique with data from 30 Asian countries during the period 2004–2019. The results reveal that financial development, when measured by the ratio of credit to GDP, has no significant impact on economic growth. In contrast, when measured by the ratio of money supply M2 to GDP, financial development exerts a negative effect on growth.