Does financial development accelerate economic growth?

2018 ◽  
Vol 10 (3) ◽  
pp. 426-435 ◽  
Author(s):  
Besnik Taip Fetai
Keyword(s):  
Economic Growth ◽  
Financial Development ◽  
Russian Federation ◽  
Central Banks ◽  
European Countries ◽  
Gdp Per Capita ◽  
Content Type ◽  
Real Gdp ◽  
Real Gdp Per Capita ◽  
Per Capita

Purpose This study aims to empirically explore whether there is causality and in which direction, i.e. whether financial development generates economic growth or whether financial development merely follows economic growth in transition European countries, including Russian Federation and Turkey, during 1998-2015. Design/methodology/approach The study uses different techniques such as pooled OLS, fixed and random effects and the Hausman–Taylor model with instrumental variables. Findings The regression results show a positive relationship between financial development indicators and real GDP per capita growth, thus supporting the hypothesis that finance leads economic growth. The result also shows that financial crisis has a negative effect on real GDP per capita growth. Furthermore, these findings show that government spending and inflation have a negative impact on real GDP per capita growth. The study also shows that financial development plays growth-supporting role in real GDP per capita growth in 20 European countries in transition, including Russian Federation and Turkey. Practical implications As financial development generates real GDP per capita growth, on the basis of the results of the study, a course of action that involves institutional improvement and incentivizing competition in the financial sector is recommended to the Central Banks’ policymakers in transition economies. These will in turn lead to higher real GDP per capita growth. Originality/value The study is original in nature and makes effort to promote financial development in transition European countries, including Russian Federation and Turkey. The findings of this study will be of value to Central Banks and other policymakers.

Measuring the Impact of Tourism on Economic Growth

2007 ◽  
Vol 13 (3) ◽  
pp. 379-388 ◽  
Author(s):  
Stanislav Ivanov ◽  
Craig Webster
Keyword(s):  
Economic Growth ◽  
General Equilibrium ◽  
Computable General Equilibrium ◽  
Gdp Per Capita ◽  
Equilibrium Models ◽  
Computable General Equilibrium Models ◽  
Real Gdp ◽  
Real Gdp Per Capita ◽  
Per Capita ◽  
The Impact

This paper presents a methodology for measuring the contribution of tourism to an economy's growth, which is tested with data for Cyprus, Greece and Spain. The authors use the growth of real GDP per capita as a measure of economic growth and disaggregate it into economic growth generated by tourism and economic growth generated by other industries. The methodology is compared with other existing methodologies; namely, Tourism Satellite Account, Computable General Equilibrium models and econometric modelling of economic growth.

EXPORT-GROWTH NEXUS WHILE USING THE BLOCK EXOGENEITY: EMPIRICAL EVIDENCE FROM PAKISTAN

2020 ◽  
Vol 11 (1) ◽  
pp. 25-46
Author(s):  
Zia Ur Rahman
Keyword(s):  
Economic Growth ◽  
Trade Openness ◽  
Time Frame ◽  
Capital Formation ◽  
Gdp Per Capita ◽  
Real Gdp ◽  
Real Gdp Per Capita ◽  
Per Capita ◽  
Import Trade ◽  
Bound Test

The core objective of the study is to analyze the association between export and eco-nomic growth under the consideration of the time frame 1967 to 2017 for Pakistan economy. The review of literature assists to find out the frequently utilize factors are the real GDP per capita, export, import, trade openness, fiscal development and capi-tal formation possible determinants of the economic growth. However, Export Led Growth (ELG) hypothesis is oftenly employed to elaborate the affiliation between ex-port and the growth. Autoregressive distributed lag (ARDL) bound test approach to cointegration accompanied with the structural break and vector auto regressive (VAR) are employed to analysis the long-term association among real GDP per capita, ex-port, import, trade openness, fiscal development and capital formation. The empirical analysis confirms the cointegration among the factors and the ELG hypothesis holds in Pakistan economy. The Block Exogeneity reveals that export and the capital for-mation have strong influence to stimulate the economic growth. While all the other factors have cumulative influence on the growth. Moreover, the impulse response exposes that if the shock of real GDP per capita, import, trade openness, fiscal devel-opment and the capital formation are given to the export, then response of export would be positive in the coming time frame.

Energy Consumption - Economic Growth Relationship and Carbon Emissions in Twelve Provinces of West of China

2012 ◽  
Vol 178-181 ◽  
pp. 885-892 ◽  
Author(s):  
Yong Ping Bai ◽  
Jing Yang
Keyword(s):  
Economic Growth ◽  
Energy Consumption ◽  
Carbon Emissions ◽  
Income Elasticity ◽  
Gdp Per Capita ◽  
Great Effort ◽  
Real Gdp ◽  
Real Gdp Per Capita ◽  
Per Capita ◽  
Level Group

This paper applies the panel unit root, heterogeneous panel cointegration and panel-based dynamic OLS to re-investigate the co-movement and relationship between energy consumption and economic growth for 12 provinces(autonomous regions, municipalities) in West of China from 1989 to 2009. The empirical results show that there is a positive long-run cointegrated relationship between real GDP per capita and energy consumption variables. Furthermore, we investigate three cross-regional groups, namely the stronger-level, medium-level and weaker-level groups, and get more important results and implications. In the long-term, a 1% increase in real GDP per capita increases the consumption of energy by different rates for three groups respectively, and subsequently it increases at different rates in three groups of the carbon emissions in West of China. The economic growth in stronger-level group is energy-dependent to a great extent, and the income elasticity of energy consumption in stronger-level group is over several times than that of the weaker-level groups. At present, West of China are subject to tremendous pressures formitigating climate change issues. It is possible that the GDP per capita elasticity of carbon emissions would be controlled in a range that orients sustainable development by the great effort.

scholarly journals Exploring the Impact of Healthcare on Economic Growth in Africa

2019 ◽  
Vol 6 (3) ◽  
pp. 45
Author(s):  
Juste Somé ◽  
Selsah Pasali ◽  
Martin Kaboine
Keyword(s):  
Economic Growth ◽  
Life Expectancy ◽  
Health Outcomes ◽  
Health Expenditures ◽  
Gdp Per Capita ◽  
Real Gdp ◽  
Cent Increase ◽  
Real Gdp Per Capita ◽  
Per Capita ◽  
The Impact

This paper empirically investigates the relationship between health expenditures, health outcomes and economic growth in Africa using data from 48 African countries over the period 2000-2015 in a panel data regression framework. In line with wider literature on economic growth as well as health economics, the paper first finds that maternal, infant and child mortality rates are all negatively and significantly associated with economic growth in Africa. In addition, life expectancy at birth is positively associated with economic growth. A 9.4-year increase in life expectancy leads to 1 per cent increase in real GDP per capita. Second, the paper finds that health expenditures have direct and indirect effects on economic growth that are positive and economically meaningful. In particular, a 10 per cent increase in health expenditures leads to an increase in annual average real GDP per capita by 0.24 per cent. Third, education emerges as a strong determinant of both economic growth and health outcomes in Africa, particularly when female education is considered. The main policy implication of this paper is that governments should aim at spending more and efficiently on the overall health system to progress over health outcomes and benefit from the positive externalities leading to economic growth. In addition, it is crucial that governments partner with private sector for resource mobilization and effective service delivery.

scholarly journals The nexus between stock market development and economic growth

2016 ◽  
Vol 14 (1) ◽  
pp. 269-277
Author(s):  
Kunofiwa Tsaurai
Keyword(s):  
Economic Growth ◽  
Stock Market ◽  
Gdp Per Capita ◽  
Market Development ◽  
Stock Market Development ◽  
Real Gdp ◽  
Real Gdp Per Capita ◽  
Short Run ◽  
Per Capita ◽  
The Relationship

The study investigated the relationship between stock market development and economic growth in Belgium using ARDL approach with annual time series data from 1988 to 2012. Real GDP per capita was used as a proxy for economic growth and stock market capitalization as a ratio of GDP as an approximate measure of stock market development. The relationship between stock market development and economic growth falls into four categories which are (1) stock market-led economic growth, (2) economic growth-led stock market development, (3) feedback effect and (4) neutrality hypothesis where the relationship between the two variables does not exist. Despite the existence of these four views on the relationship between stock market and economic growth, it appears from the literature review done by the author that majority of the empirical evidence support the stock market-led economic growth view. The fact that the topic on the directional causality between stock market and economic growth is still inconclusive is the major motivating factor why the author chose to investigate the relationship between the two variables in Belgium. The study observed that there exist an insignificant long run causality running from stock market development towards economic growth in Belgium. This relationship was not detected in the short run. Moreover, the reverse causality from real GDP per capita to stock market capitalization both in the long and short run was not detected in Belgium. These results are at variance with the majority of the empirical findings reviewed earlier on. It could possibly be that certain conditions that are necessary to enable stock market to significantly positively influence economic growth were not in place in Belgium. Therefore, the study urges the Belgium authorities to put in place the right environment, policies and programmes that enable the stock market to play its role of stimulating economic growth.

scholarly journals Explaining Growth in African Countries – What Matters?

2019 ◽  
Vol 69 (3) ◽  
pp. 467-484
Author(s):  
José Augusto Lopes Da Veiga ◽  
Alexandra Ferreira-Lopes ◽  
Tiago Neves Sequeira ◽  
Marcelo Serra Santos
Keyword(s):  
Economic Growth ◽  
Growth Rate ◽  
Public Debt ◽  
Gdp Per Capita ◽  
African Countries ◽  
Real Gdp ◽  
Real Gdp Per Capita ◽  
Short Run ◽  
Per Capita ◽  
Determinants Of Economic Growth

In this paper we analyse the role of the traditional determinants of economic growth in the African countries in the period between 1950 and 2012. Due to the specificity and the single nature of each one of these countries, methods that take into account observed and unobserved heterogeneity are used. Results highlight the relevance of the growth rate of the capital stock to growth in the short-run, which is significant in all regressions. The growth rate of the government to GDP ratio is also important in all but one of the regressions in which it appears, and its growth is harmful for the growth of GDP per capita in the short-run. The variables related to public debt do not present any relationship with economic growth. Human capital has a positive relationship with economic growth in regressions that do not include public debt. The growth rate of real GDP per capita also depends (negatively) on its past value, i.e., the lower the real GDP per capita the higher will be its growth rate.

scholarly journals Cashless Payments and Economic Growth in Selected European Countries

2020 ◽  
Vol 54 (3) ◽  
pp. 33
Author(s):  
Marlena Grzelczak ◽  
Radosław Pastusiak
Keyword(s):  
Economic Growth ◽  
Eastern Europe ◽  
Western Europe ◽  
Central And Eastern Europe ◽  
Gdp Per Capita ◽  
Real Gdp ◽  
Payment Cards ◽  
Real Gdp Per Capita ◽  
Per Capita ◽  
Transfer Order

<p>Purpose of the article: The aim of the paper was to show connections between the instruments of cashless payments and economic growth. The goal was to find the answers to the following research questions: What is the current share of payments with the use of particular forms of cashless payments in total payments?; What forms of cashless payments are connected with economic growth measured by real GDP per capita in the group of countries of Central and Eastern Europe and Western Europe?; What is the relation between the value of cashless payments and economic growth measured by real GDP per capita in the group of countries of Central and Eastern Europe and Western Europe?</p><p>Research methods: Spearman’s rank correlation.</p><p>Research results: The authors have found that the highest share in terms of the number of payments in total payments in the countries of Central and Eastern Europe constituted payments with the use of payment cards, then, the payments with the use of a transfer order. Whereas, in the countries of Western Europe, apart from the fact that high percentage of payments in total constituted payments with the use of payment cards and transfer orders, more and more payments are made with the use of the instruments of e-money. Examining mutual relationships, information about correlational connections that occur between economic growth measured by GDP per capita and value of payments with the use of some instruments of cashless payments was obtained. The main conclusion that can be drawn after data analysis is positive relationships between the value of payments with the use of a transfer order, payment card and economic growth found both in the countries of Central and Eastern Europe and the countries of Western Europe. In the countries of Western Europe, the payments with the use of a direct debit turned out to be insignificant, whereas the payments with the use of instruments of e-money were signifiant. Taking into account the force of relationships, it can be said that higher positive correlation is shown by the value of payments with the use of a transfer order with reference to real GDP per capita in the countries of Western Europe (0.80). In the countries of Central and Eastern Europe, it is only 0.48. Mutual connections between the value of payments with the use of payment cards and economic growth are similar in both groups of countries. What is interesting, high impact on real GDP per capita – about 0.80 – is shown by the payments with the use of instruments of e-money. This study may represent a contribution to further research, that is, an analysis of cause-and-effect relationships in the field of cashless payments and economic growth, including division of countries in terms of, for example, the level of wealth.</p><p>Added value: Analysis of current literature on the impact of cashless payments on economic growth and an empirical analysis.</p>

scholarly journals Impact of the demographic dividend on economic growth

2018 ◽  
Vol 2 (4) ◽  
pp. 85-135
Author(s):  
Zarina Kazbekova
Keyword(s):  
Economic Growth ◽  
Russian Federation ◽  
Population Decline ◽  
Gdp Per Capita ◽  
Demographic Dividend ◽  
Working Age ◽  
Real Gdp Per Capita ◽  
The Russian Federation ◽  
Per Capita ◽  
Working Age Population

In the context of the working-age population decline in the Russian Federation, the study of the influence of the dynamics of the share of the working -age population on economic growth is of particular interest. The main purpose of the article is to assess the contribution of the first demographic dividend to the GDP per capita growth rate in Russia betwеen 1997 and 2015. The main methods used by the author of this work are statistical analysis and econometric modeling based on Rosstat data. According to the results obtained in the course of this study, the first demographic dividend provided about 13% growth of real GDP per capita in the Russian Federation in 1997-2015. It has been proved that the age structure of the population is important.

scholarly journals The Impact of Human Capital Development on Economic Growth in Ethiopia: Evidence from ARDL Approach to Co-Integration

2014 ◽  
Vol 1 (3) ◽  
pp. 127-136 ◽  
Author(s):  
Kidanemariam Gidey Gebrehiwot
Keyword(s):  
Economic Growth ◽  
Human Capital ◽  
Gdp Per Capita ◽  
School Enrolment ◽  
Real Gdp ◽  
Long Run ◽  
Real Gdp Per Capita ◽  
Short Run ◽  
Per Capita ◽  
The Government

The main objective of the study was to investigate the long run and short run impact of human capital on economic growth in Ethiopia (using real GDP per capita, as a proxy for economic growth) over the period 1974/75-2010/2011. The ARDL Approach to Co-integration and Error Correction Model are applied in order to investigate the long-run and short run impact of Human capital on Economic growth. The finding of the Bounds test shows that there is a stable long run relationship between real GDP per capita, education human capital, health human capital, labor force, gross capital formation, government expenditure and official development assistance. The estimated long run model revels that human capital in the form of health (proxied by the ratio of public expenditure on health to real GDP) is the main contributor to real GDP per capita rise followed by education human capital (proxied by secondary school enrolment). Such findings are consistent with the endogenous growth theories which argue that an improvement in human capital (skilled and healthy workers) improves productivity. In the short run, the coefficient of error correction term is -0.7366 suggesting about 73.66 percent annual adjustment towards long run equilibrium. This is another proof for the existence of a stable long run relationship among the variables. The estimated coefficients of the short-run model indicate that education is the main contributor to real GDP per capita change followed by gross capital formation (one period lagged value) and government expenditure (one period lagged value). But, unlike its long run significant impact, health has no significant short run impact on the economy. Even its one period lag has a significant negative impact on the economy. The above results have an important policy implication. The findings of this paper imply that economic performance can be improved significantly when the ratio of public expenditure on health services to GDP increases and when secondary school enrolment improves. Such improvements have a large impact on human productivity which leads to improved national output per capita. Hence policy makers and / or the government should strive to create institutional capacity that increase school enrolment and improved basic health service by strengthening the infrastructure of educational and health institutions that produce quality manpower. In addition to its effort, the government should continue its leadership role in creating  enabling environment that encourage better investment in human capital (education and health) by the private sector.  

scholarly journals Does Trade Openness Matter for Economic Growth in the CEE Countries?

2017 ◽  
Vol 17 (1) ◽  
pp. 3-24 ◽  
Author(s):  
Bernard Njindan Iyke
Keyword(s):  
Economic Growth ◽  
Fixed Effects ◽  
Trade Openness ◽  
Gdp Per Capita ◽  
Eastern European ◽  
Closed Economies ◽  
Real Gdp ◽  
The World ◽  
Real Gdp Per Capita ◽  
Per Capita

AbstractThis paper sets out to answer the question: Is trade openness important for economic growth in the Central and Eastern European (CEE) countries? The policyoriented measures of trade openness used in earlier studies have been argued to be subjective, while the simple outcome-oriented measures only capture one aspect of trade openness, namely: countries’ share of trade. Hence, following Squalli and Wilson (2011), the paper constructs a new outcome-oriented measure of trade openness which captures a country’s share of trade, and its interaction and interconnectedness with the rest of the world. Using fixed-effects regressions for 17 CEE countries over the period 1994 - 2014, the paper finds trade openness to be important for growth within the CEE countries. In particular, the results show that increases in trade openness is associated with increases in real GDP per capita growth within these countries. The results appear significantly the same after we dropped Croatia and Estonia - two historically closed economies.

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