摘要：This study aims to provide new insights on examining whether regulatory quality influences the relation between financial development and economic growth by applying a nonlinear panel smooth transition regression (PSTR) model. Using the data from Worldwide Governance Indicators (WGI) to assess the soundness of regulatory quality, this paper finds that the relationship between financial development, including life insurance and stock markets, and economic growth is significantly positive in the countries with relatively better regulatory quality. Our findings not only indicate that sound regulatory quality could encourage the growth effect of life insurance and stock market sectors but also have far-reaching practical implications for other economies to realize regulatory quality should matter for the development of economic growth.
