BIS Review 15/2006  1  At the cross-country level, various measures of financial development (including measures of financial sector assets, domestic credit to private sectors and stock market capitalization) are found to be positively related to economic growth. Other studies establish a positive relationship between financial development and growth at the industry level (Rajan and Zingales, 1998).
Similarly, at the firm level, firms in countries with deeper financial development are able to obtain more external funds and thereby enabled to grow faster (Demirgúc-Kunt and Maksimovic, 1998). A basic indicator of financial development is the contribution of finance-related activities to GDP.