A crosscountry analysis of financial growth
The cross-country examination of the finance-growth nexus was initiated by Goldsmith (1969). Using data on 35 countries from 1860 - 1963, he found an evidence of a relationship between economic and financial development over long periods, and that periods of rapid economic growth have often been accompanied by an above-average rate of financial development. He reported a clear relationship between financial development and economic growth albeit statistically weak. King and Levine (1993) were of the pioneers to show the potential for panel datasets such as Beck et al. (1999). They study 80 countries over the period 1960-1989 by controlling for other factors that affect long-run growth. They found a strong predictive component in the relation in addition to consistent contemporaneous nature for the relationship between aggregate measures of financial depth and growth. They argue that current financial depth can predict economic growth over the long run of ten to thirty years. Reporting that the predetermined component of financial development is robustly correlated with future rates of economic growth, physical capital accumulation, and economic efficiency improvements. And conclude that "better financial systems stimulate faster productivity growth and growth in per capita output by funnelling society's resources to promising productivity-enhancing endeavours." (King and Levine, 1993b, p. 540.). King and Levine (1993) sat forth the stances for measuring financial development, which were widely used in later studies. In addition, Atje and Jovanovic (1993) contends a large effect of stock markets on subsequent development yet failed to find a similar effect of bank lending.
Subsequent work investigates which features of the financial system are key for fostering growth. Demirguc¸-Kunt and Levine (2001) is a cross-country comparison of banks, markets, and development. It covers a great deal of empirical work using datasets ranging from micro-level firm data to international comparative studies and employs a wide range of econometric tools.
The debate of a bank-based versus market-based financial system has taken it's share of cross-country studies.Levine (2002) cannot determine an empirical support for either the bank- or market-based but observe a vivid relation between financial development and economic growth. Demirguc-Kunt and Maksimovic (2002) draw on a contemporary survey of some 4,000 firms - small and large - in 54 countries that were asked for their perception of financing, legal and corruption constraints to their growth. The study shows that while financial development can explain the growth of firms neither bank or market based financial systems signal a difference. These results in general suggest that the type of the financial system is of secondary importance in the course of development. The studies add to other empirical work (e.g. Beck and Levine, 2002) that supports whats known as the middle-ground which assigns the importance to the functionality and not type of the financial system. In addition, Levine and Zervos (1998) suggested that equity markets and banks could be exerting complementary services to the economy.(责任编辑：BUG)