Bank depth, stock market liquidity and urbanisation at various stages of economic development and time period: a simultaneous equations approach

Jin, Xiaoxue (2017) Bank depth, stock market liquidity and urbanisation at various stages of economic development and time period: a simultaneous equations approach. MRes thesis, University of Nottingham.

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Abstract

The finance and growth nexus has been discussed since the last century. Elements related to them also attract a lot of attentions in the research area. This study explores the systematic interaction among bank depth, stock market liquidity, and urbanisation. By constructing a Simultaneous Equations Model (SEM) consists of three equations, cross-equations correlations were taken into account in the Three-stage Least Squared (3SLS) estimation model using a large and new panel dataset of 43 economies for the time period 1990 to 2014. In the meantime, multidimensional analysis was conducted by splitting the sample into different groups to study the difference among countries in various stages of economic development and time period. Positive and significant impact is found from bank depth to stock market liquidity while mutual positive effect exists between urbanisation and bank depth. The stock market liquidity impact urbanisation positively but such impact is not significant. However, since both bank depth and stock market liquidity both positively predict urbanisation when entered together in the regression, the results are consistent with the views that financial development provides important services to growth, in this case, the growth of urbanisation. Limitations and further research are suggested in the last.

Item Type: Thesis (University of Nottingham only) (MRes)
Supervisors: Banerji, Sanjay
Ahmed, Shamim
Keywords: bank depth, stock market liquidity, urbanisation, simultaneous equations model, three-stage least squares
Subjects: H Social sciences > HG Finance
Faculties/Schools: UK Campuses > Faculty of Social Sciences, Law and Education > Nottingham University Business School
Item ID: 39446
Depositing User: Jin, Xiaoxue
Date Deposited: 15 Mar 2017 04:40
Last Modified: 17 Mar 2017 03:49
URI: http://eprints.nottingham.ac.uk/id/eprint/39446

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