The two opposing views on the finance-growth nexus can the compared to the “chicken and egg’ adage. The one school of economic thinking as proposed by Bagehot (1873) and Hick (1969) in Levine (1997, p.688) states that industrialisation in England was ignited by the availability of capital to undertake “immense works”. To support this argument, Schumpter (1912) in Levine (1997, p.688) contends that the banking institutions encourage technological innovation by identifying and supporting those entrepreneurs with the most innovative products or processes.
In contrast to this, Levine (1997, p.688) also presents the arguments of those economists (Robertson  and Lucas ) who contend simply that finance follows enterprise and that financial markets are a consequence of growth. However, considerable empirical research on the subject of the nexus between financial market development and economic growth was carried out in the 1990’s, which supports the positive causal effect between financial market development and economic growth.
The recent global financial crisis (GFC) has shed light on the impact that financial markets have on the economy of nations. For this reason, an investigation into the finance-growth nexus within the SADC regional context was undertaken. The study used data from 13 countries over a 19 year period from 1993 to 2011. The Granger causality results indicate that there is a demand-leading phenomenon where finance follows growth, however panel data regression models could not conclusively predict a relationship between economic growth and financial market development. However, it was found that the level of banking sector development did have the greatest impact on economic growth when compared to other financial market indicators.