{"title":"Do financial development and political institutions act as substitutes or complements?","authors":"Luisa R. Blanco, Nabamita Dutta","doi":"10.1080/13600818.2020.1849593","DOIUrl":null,"url":null,"abstract":"ABSTRACT This paper examines the interactive impact of financial development and political institutions on a specific development outcome: gross domestic investment. We explore whether financial development and political institutions act as substitutes or complements in the context of domestic investment. Using data from the period 1975–2017 for 131 countries to construct annual and five-year interval panels, we employ Fixed Effect (FE) and Dynamic Panel estimators (System GMM) to test our hypothesis. We find a significant interactive impact of political institutions and financial development on domestic investment. More specifically, we find a substitution effect among these factors. In the presence of inefficient institutions, financial development mitigates the negative impact of political institutions on domestic investment, and vice-versa.","PeriodicalId":1,"journal":{"name":"Accounts of Chemical Research","volume":null,"pages":null},"PeriodicalIF":16.4000,"publicationDate":"2020-12-09","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1080/13600818.2020.1849593","citationCount":"1","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Accounts of Chemical Research","FirstCategoryId":"1085","ListUrlMain":"https://doi.org/10.1080/13600818.2020.1849593","RegionNum":1,"RegionCategory":"化学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q1","JCRName":"CHEMISTRY, MULTIDISCIPLINARY","Score":null,"Total":0}
引用次数: 1
Abstract
ABSTRACT This paper examines the interactive impact of financial development and political institutions on a specific development outcome: gross domestic investment. We explore whether financial development and political institutions act as substitutes or complements in the context of domestic investment. Using data from the period 1975–2017 for 131 countries to construct annual and five-year interval panels, we employ Fixed Effect (FE) and Dynamic Panel estimators (System GMM) to test our hypothesis. We find a significant interactive impact of political institutions and financial development on domestic investment. More specifically, we find a substitution effect among these factors. In the presence of inefficient institutions, financial development mitigates the negative impact of political institutions on domestic investment, and vice-versa.
期刊介绍：
Accounts of Chemical Research presents short, concise and critical articles offering easy-to-read overviews of basic research and applications in all areas of chemistry and biochemistry. These short reviews focus on research from the author’s own laboratory and are designed to teach the reader about a research project. In addition, Accounts of Chemical Research publishes commentaries that give an informed opinion on a current research problem. Special Issues online are devoted to a single topic of unusual activity and significance.
Accounts of Chemical Research replaces the traditional article abstract with an article "Conspectus." These entries synopsize the research affording the reader a closer look at the content and significance of an article. Through this provision of a more detailed description of the article contents, the Conspectus enhances the article's discoverability by search engines and the exposure for the research.
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