Linking the missing market: The effect of bond markets on economic growth

Patara Thumrongvit, Yoonbai Kim, Chong Soo Pyun

Research output: Contribution to journalArticlepeer-review

48 Scopus citations


Past studies have largely focused on the positive role of banks and stock markets on economic growth. This paper adds bond markets as a third key component of the financial system. Using a panel data set of 38 countries, and applying the generalized method of moments techniques for dynamic panels, we find that (i) stock market development is positively related to economic growth; (ii) the contributing role of bank credit to economic growth diminishes as domestic bond markets develop; (iii) government bonds are positively related to economic growth, while the effects of corporate bonds change from negative to positive, as domestic financial structures expand in size and diversity.

Original languageEnglish
Pages (from-to)529-541
Number of pages13
JournalInternational Review of Economics and Finance
StatePublished - Jun 2013

Bibliographical note

Funding Information:
We are grateful to the editor, Hamid Beladi and two anonymous referees for their helpful comments. We are also indebted to Daewon Kim and Frank SanPietro for their research and editorial assistances. This study was partially supported by a summer research grant from the Wang Center for International Business Education and Research at the University of Memphis .


  • Bond markets
  • Economic growth
  • Financial market
  • Panel data analysis

ASJC Scopus subject areas

  • Finance
  • Economics and Econometrics


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