Artikel

Does financial integration enhance economic growth in China?

China is a fascinating country in Asia, the second-largest economy in the world, with incredible economic growth and development in the last two decades. In addition, China has dramatically enjoyed a disciplined and successful financial integration with the region and the world in the same period. As such, it is interesting to examine a potential link between economic growth and financial integration in this most populous country. This paper was conducted to identify whether financial integration fosters Chinese economic growth. The Auto-Regressive Distributed Lags (ARDL) model is selected, utilizing the most updated data on a globalization (or integration) index. Two distinct aspects of financial integration, the de facto (proxied for economic activities) and the de jure (proxied for the Government policies leading to integration), are considered in this paper. We apply an econometric technique, using yearly aggregated data, to examine a long-term co-integration and a causal relationship between financial integration and economic growth in China. Findings from this paper indicate a long-term co-integration between financial integration de facto and economic growth in China. The bidirectional causality between financial integration and economic growth in China is also confirmed using the Granger causality test.

Language
Englisch

Bibliographic citation
Journal: Economies ; ISSN: 2227-7099 ; Volume: 8 ; Year: 2020 ; Issue: 3 ; Pages: 1-18 ; Basel: MDPI

Classification
Wirtschaft
Economic Integration
Financial Aspects of Economic Integration
Economic Growth of Open Economies
Subject
financial integration
economic growth
long-term co-integration
China

Event
Geistige Schöpfung
(who)
Duc Hong Vo
Anh The Vo
Chi Minh Ho
Event
Veröffentlichung
(who)
MDPI
(where)
Basel
(when)
2020

DOI
doi:10.3390/economies8030065
Handle
Last update
10.03.2025, 11:43 AM CET

Data provider

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Object type

  • Artikel

Associated

  • Duc Hong Vo
  • Anh The Vo
  • Chi Minh Ho
  • MDPI

Time of origin

  • 2020

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