Paper Title
FINANCIAL STRUCTURE AND ECONOMIC GROWTH
Abstract
Abstract - This paper presents a systematic literature review that explores the impact of financial structure on economic growth. The research question guiding this review is: What is the impact of financial structure on economic growth, as evidenced by the existing literature? The review focuses on two key components of financial structure: financial intermediation and the stock market. The analysis of 50 relevant studies reveals a positive relationship between financial structure and economic growth. The findings highlight the crucial role of a well-developed banking sector in facilitating investment, innovation, and productivity growth. Access to credit enables businesses to expand operations and drive economic development. Similarly, the stock market plays a significant role in promoting investment, entrepreneurship, and capital formation. However, the relationship between financial structure and economic growth is nuanced, with variations across countries, regions, and time periods. Institutional factors, regulatory frameworks, and macroeconomic conditions shape this relationship. It is crucial to consider these contextual factors when interpreting the findings. The findings contribute to a deeper understanding of the impact of financial structure on economic growth and emphasize the need for further research to explore heterogeneous effects and underlying mechanisms. This systematic literature review provides a comprehensive overview of the literature, guiding future research directions in this important area of inquiry.