Kojo, Naoko2013-08-282013-08-282000-06https://hdl.handle.net/10986/15476The financial system in Bangladesh has suffered from years of systemic and chronic problems, represented by weak supervision and enforcement, deficient accounting and reporting practices, and more importantly, widespread loan defaults and delinquencies. It is widely perceived that major inadequacies in the financial sector have had a considerable growth restraining effect over the years, by inhibiting private investment activities and productivity growth, as well as promoting misallocation of resources. It is paramount important that the government takes an urgent policy action to reform the mal-functioning financial sector. The main objective of such reforms is to develop a market oriented, disciplined modem system for mobilization of resources, efficient allocation of resources from both domestic and foreign sources, and reduction of poverty through sustained economic growth. This paper is organized as follows. Section two reviews the recent theoretical and empirical literature on finance and growth. Section three summarizes the main findings of our cross-country analysis, conducted to estimate the growth impact of financial sector distress in Bangladesh. Finally, section four concludes the paper.en-USCC BY 3.0 IGOACCOUNTINGACCOUNTING STANDARDSADVERSE IMPACTSADVERSE SELECTIONBANK ASSETSBANK POLICYBANKING INSTITUTIONSBANKING SECTORBANKING SECTOR ASSETSBANKING SYSTEMBANKSBLACK MARKETBLACK MARKET PREMIUMBROAD MONEYCAPITAL ACCUMULATIONCAPITAL FLOWSCAPITAL INFLOWSCASH FLOWCASH FLOWSCDCENTRAL BANKCENTRAL BANK NOTECENTRAL BANKSCIVIL LAWCIVIL LAWSCLOSED ECONOMYCOLONIALISMCOMMERCIAL BANKCOMMERCIAL BANK ASSETSCOMMERCIAL BANKINGCOMMERCIAL BANKSCOMMON LAWCOMPETITIVENESSCONTRACT ENFORCEMENTCONVERGENCE HYPOTHESISCORPORATE GOVERNANCECOUNTRY REGRESSIONSCREDIT ALLOCATIONCREDITORCREDITOR RIGHTSCREDITORSCREDITSCROSS-COUNTRY ANALYSISCURRENCYDEBTDEBT MATURITYDEPENDENT VARIABLEDEPOSITDEPOSIT RATEDEPOSIT RATESDERIVATIVEDEVELOPING COUNTRIESDEVELOPING COUNTRYDEVELOPMENT BANKSDEVELOPMENT ECONOMICSDEVELOPMENT INDICATORSDOMESTIC SAVINGSDUMMY VARIABLESDYNAMIC PANELECONOMETRIC ANALYSISECONOMIC ACTIVITIESECONOMIC ACTIVITYECONOMIC DEVELOPMENTECONOMIC GROWTHECONOMIC LITERATUREECONOMIC PERFORMANCEECONOMIC PERFORMANCESECONOMIC RESEARCHECONOMIC THEORYEDUCATIONAL ATTAINMENTEMPIRICAL EVIDENCEEMPIRICAL LITERATUREEMPIRICAL RESULTSEMPIRICAL STUDIESENDOWMENTSENFORCEMENT MECHANISMSEQUITY MARKETSERROR TERMESTIMATED COEFFICIENTESTIMATED COEFFICIENTSEXCHANGE RATEEXPLANATORY VARIABLESEXTERNAL FINANCEEXTERNAL FINANCINGFAMILIESFEDERAL RESERVEFEDERAL RESERVE BANKFINANCIAL CONSTRAINTSFINANCIAL CONTRACTSFINANCIAL DEPTHFINANCIAL DEVELOPMENTFINANCIAL DISTRESSFINANCIAL INSTITUTIONSFINANCIAL INTERMEDIARIESFINANCIAL INTERMEDIARYFINANCIAL INTERMEDIATIONFINANCIAL MARKETSFINANCIAL SECTORFINANCIAL SECTOR DEVELOPMENTFINANCIAL SECTOR POLICIESFINANCIAL SECTOR REFORMFINANCIAL SECTORSFINANCIAL SERVICESFINANCIAL SERVICES INDUSTRYFINANCIAL STRUCTUREFINANCIAL SYSTEMFINANCIAL SYSTEMSFIRM GROWTHGDPGDP PER CAPITAGROWTH IMPACTGROWTH LITERATUREGROWTH MODELGROWTH RATEGROWTH RATESGROWTH REGRESSIONGROWTH REGRESSIONSHOUSEHOLDSHUMAN CAPITALINCOMEINCOME LEVELINDUSTRIAL COUNTRIESINDUSTRIALIZATIONINEFFICIENCYINFORMATION ASYMMETRIESINTEREST RATEINTEREST RATE SPREADSINTEREST RATESINTERNATIONAL FINANCEINTERNATIONAL MARKETSINVESTMENT ACTIVITIESINVESTMENT OPPORTUNITIESJURISDICTIONSLAW ENFORCEMENTLEGAL ENVIRONMENTLEGAL SYSTEMSLEGAL TRADITIONLEGAL TRADITIONSLOANLOAN DEFAULTSLONG-RUN GROWTHLONG-TERM GROWTHM2MACROECONOMIC DATAMEAN VALUEMONETARY ECONOMICSMORAL HAZARDNPLOUTPUTOUTPUT GROWTHPER CAPITA GROWTHPOLICY MAKERSPOLICY REFORMSPOLICY RESEARCHPOLITICAL ECONOMYPRIVATE BANKSPRIVATE CREDITPRIVATE INVESTMENTPRIVATE SAVINGPRIVATE SAVINGSPRODUCTIVE INVESTMENTPRODUCTIVITY GROWTHPUBLIC BANKSPUBLIC GOODPUBLIC POLICYRATE OF RETURNRATE OF RETURN ON CAPITALREAL GDPREGRESSION ANALYSISRESOURCE ALLOCATIONRIGHTS OF CREDITORSRISK MANAGEMENTRISK MANAGEMENT SERVICESSAVINGSSAVINGS RATESSECONDARY SCHOOLINGSECTOR ACTIVITIESSHAREHOLDERSSOURCE OF FUNDSSTANDARD DEVIATIONSTATE-OWNED ENTERPRISESSTATISTICAL ANALYSISSTOCK MARKETSTOCK MARKETSTECHNOLOGICAL INNOVATIONTELECOMMUNICATIONSTOTAL FACTOR PRODUCTIVITYTOTAL FACTOR PRODUCTIVITY GROWTHTRADINGTRANSACTIONTRANSACTION COSTSWEALTHWorld Bank10.1596/15476