Financial Development and Industrial Economic Growth - Empirical Studies on Taiwan

• Main Authors: Shiou-Haw Kuo, 郭修華
• Other Authors: Shu-Hwa Chang
• Format: Others
• Language: zh-TW
• Published: 2004
• Online Access: http://ndltd.ncl.edu.tw/handle/11153014250571272911

碩士 === 真理大學 === 財經研究所 === 92 === This paper investigates the causal relationship between the financial development and industrial economic growth of Taiwan by using the vector error correction model (VECM). Utilizing time-series analysis, Granger causality test is performed on the basis of the framework of the VECM. We employ quarterly data on industrial output, indicators of stock market liquidly, stock market volatility, and banking development during 1986:1-2003:3. We found that the Granger causality between output and financial development variables differ significantly among different knowledge intensity industries. For both the high-knowledge intensity and mid-knowledge intensity industries, the output has weaker relationships with the financial development. Nevertheless, in the low-knowledge intensity industry, there exist stronger relationships between output and financial development indicators. Furthermore, all the financial development indicators Granger cause output, and there is bidirectional causality between the volatility of stock market and output. Finally, we attempt to provide some policy implications about the empirical results mentioned above.