A Meta-Analysis of Financial Development Influences on Economic Growth

The influence of financial development on economic growth is considered as one of the most important and controversial debates in the field of financial development, as well as economic growth, from a theoretical and experimental perspective. This study tries to answer the major question of whether financial development influences economic growth, and if so, what are the influencing variables. To do so, using keywords such as financial development and economic development, we reviewed 1062 studies among Persian and Latin papers available in domestic databases, as well as those in journal articles, conferences, and dissertations. Given that financial development as the independent variable and economic development as the dependent variable should exist in all reviewed studies, 13 studies were selected according to the six-phase meta-analysis methodology, thereby 34 regression models were provided. Next, employing a Dual and Tweedy method and using the funnel chart, we evaluated the study bias. Then, employing SPSS ® and CAM2 ®, we tested the relationship between financial development and economic growth. The findings showed that the magnitude of the influences of financial development on economic growth was equal to 30%. Moreover, following the financial development, the openness degree of trade space, the investments, as well as the government expenditures are variables having the most significant influences on economic growth. Therefore, addressing the financial sector parameters, their development, as well as conditions that can lead to financial development can be considered as one of the strategies regarding economic development.