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Document Type

Thesis - University Access Only

Award Date


Degree Name

Master of Science (MS)

Department / School


First Advisor

Joseph M. Santos


In this paper, I examine the exogenous effect of financial-intermediary development on economic growth in a cross-section of 72 countries. I use the legal origins of countries and (potential) settler mortality for Europeans during the colonial era in order to extract the exogenous component of the measures of financial-intermediary development. I find that (log) settler mortality rates better explain the differences in the levels of development of financial sectors of countries today, than when using legal origins of countries. The results from a GMM-IV estimate reveal a strong, positive causality of the exogenous component of financial-intermediary development on long-run economic growth. Using deposits in the financial systems as the main measure for financial-intermediary development on economic growth, I conclude that, for example, if Central African Republic increased its financial system deposits/GDP value of 4.69% to the level of that for the USA of 66.12%, Central African Republic would accelerate its GDP/capita growth by an additional 12.41% in a year.

Library of Congress Subject Headings

Economic Development -- Cross-cultural studies
Financial institutions -- Cross-cultural studies


Includes bibliographical references (pages 88-94)



Number of Pages



South Dakota State University



Rights Statement

In Copyright