Institutions, Financial Development and Economic Growth
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Based on the data of provinces in 1998-2017 in China, the paper uses dynamic panel threshold model to explore the relationship between institution, financial development and economic growth with marketization process as institutions. The results show that the impact of institutions and financial development on economic growth has a threshold effect. Under low institutions quality, There is a negative impact of institutions and financial development on growth. Under high institutions quality, the negative impact of financial development on economic growth becomes smaller and insignificant. The development of the stock market can promote economic growth more effectively than the development of the banking industry.
Financial development, Institutions, Economic growth, Dynamic panel threshold model