Financial Sector Performance and Economic Growth vis-a-vis Development in Nigeria : A Granger Causality Approach

2018 ◽  
Vol 3 (6) ◽  
pp. 20-27
Author(s):  
Okaro , Celestine ◽  
Ogbonna , Kelechukwu Stanley ◽  
Uzondu , Chikodiri Scholastica ◽  
Adoms , Francis Uju
Keyword(s):  
Economic Growth ◽  
Granger Causality ◽  
Financial Sector ◽  
Sector Performance

scholarly journals Financial Sector Development and Economic Growth in Bangladesh: A Factor Analysis Based Causality Approach

2017 ◽  
Vol 9 (8) ◽  
pp. 229 ◽  
Author(s):  
Altaf Hossain ◽  
Suman Biswas ◽  
Md. Nasif Hossain ◽  
Arnab Kumar Poddar
Keyword(s):  
Economic Growth ◽  
Factor Analysis ◽  
Form Factor ◽  
Granger Causality ◽  
Granger Causality Test ◽  
Financial Sector ◽  
Causality Test ◽  
Financial Factors ◽  
Financial Factor ◽  
Private Credit

To understand the finance-growth nexus, this paper is intended to find a fewer number of important financial factors using Factor Analysis on some selected indicators of Bangladesh financial sector during the period 1988-2013. This paper then tries to check whether the identified financial factors cause economic growth or economic growth causes financial factors using the Granger – Causality test. Factor Analysis shows that financial indicators under the dimensions, depth and stability form Factor 1, and the indicators under the dimensions, use/access and efficiency form Factor 2. Being consistent with economic sense, Granger – Causality test shows that no financial factor significantly causes economic growth; rather economic growth causes “depth/stability” (‘private credit + capitalization’ /non-performing loan) factor of financial sector during the period. In summary, on average, financial sector of Bangladesh is being unstably (being increased non-performing loan) deepened with response to the demand of economic growth since 1988.

scholarly journals Analysis of Financial Sector Reforms and Impacts: Reflections from Pakistan

2011 ◽  
Vol 3 (2) ◽  
pp. 91-102
Author(s):  
Ali Raza ◽  
Muhammad Usman . ◽  
Muhammad Akram .
Keyword(s):  
Economic Growth ◽  
First Generation ◽  
Financial Sector ◽  
Financial Indicators ◽  
Policy Makers ◽  
Future Studies ◽  
Financial Restructuring ◽  
Sector Performance ◽  
The Government ◽  
The Impact

The purpose of this paper is to examine all efforts made by the Government of Pakistan in order to uplift the efficiency of financial sector through financial restructuring institutions such as banks, as well as to recognize the impact of these reforms on various financial indicators. Results of this study suggested that financial sector performance was very much better after the completion of first generation reforms but many new reforms are still required for macroeconomic stability and economic growth of Pakistan. This was the first attempt made by researcher in which detailed discussion was provided about financial sector reforms and it will help out the policy makers while developing policies for future and it will enhance the knowledge of economists and all other beneficiaries as well. Moreover, discussion for further reforms and gap for future studies was also provided.

scholarly journals Inflation and Financial Sector Performance: The Case of Nigeria

2014 ◽  
Vol 7 (1) ◽  
pp. 55-69 ◽  
Author(s):  
R. Santos Alimi
Keyword(s):  
Economic Growth ◽  
Financial Development ◽  
Financial Sector ◽  
Macroeconomic Performance ◽  
Financial Sector Development ◽  
Long Run ◽  
Negative Effect ◽  
Short Run ◽  
Sector Performance ◽  
Definition Of

Abstract The paper examines the long run and short run relationships between inflation and the financial sector development in Nigeria over the period between 1970 and 2012. Three variables, namely; broad definition of money as ratio of GDP, quasi money as share of GDP and credit to private sector as share of GDP, were used to proxy financial sector development. Our findings suggest that inflation presented deleterious effects on financial development over the study period. The main implication of the results is that poor macroeconomic performance has deleterious effects to financial development - a variable that is important for affecting economic growth and income inequality. Moreover, we observed a negative effect of the measures of financial development on growth, suggesting that impact of inflation on the economic growth passes through financial sector. Therefore, low and stable prices, is a necessary first step to achieving a deeper and more active financial sector that will enhance growth as predicted by Schumpeter.

scholarly journals Petroleum Consumption and Financial Development in Malaysia

2016 ◽  
Author(s):  
Jen-Eem Chen ◽  
Yan-Ling Tan ◽  
Chin-Yu Lee ◽  
Lim-Thye Goh
Keyword(s):  
Economic Growth ◽  
Energy Consumption ◽  
Granger Causality ◽  
Financial Development ◽  
Granger Causality Test ◽  
Financial Sector ◽  
Causality Test ◽  
Distributed Lag ◽  
Autoregressive Distributed Lag ◽  
Long Run

This paper aims to contribute to the existing literature by examining the dynamic relationship among petroleum consumption, financial development, economic growth and energy price. The sample of this study is based on the Malaysian annual data from 1980 to 2010. The model specification was examined in the Autoregressive Distributed Lag (ARDL) framework and the results revealed the existence of a long-run equilibrium. The findings indicated that financial development and economic growth cause a demand for energy to escalate in the long run. The Toda-Yamamoto (TYDL) non Granger-causality test provides evidence that there is unidirectional Granger-causality running from financial development and economic growth to energy consumption in the long run. This suggests that Malaysia is not an energy-dependent country. Hence, the government could implement energy conservation policies to reduce the waste of energy use. Given that development in the financial sector, and economic growth increase petroleum consumption in Malaysia, the policies pertaining to energy consumption should incorporate the development of the financial sector and economic growth of country.   Keywords: Petroleum consumption, financial development, non-renewable energy, Autoregressive Distributed Lag (ARDL), Toda-Yamamoto (TYDL) non Granger-causality test

scholarly journals Financial Sector, Democracy and Economic Growth: A Panel Data Analysis

2016 ◽  
Vol 55 (4I-II) ◽  
pp. 437-453 ◽  
Author(s):  
Muhammad Ishtiaq ◽  
Muhammad Tariq Majeed ◽  
Muhammad Sohail
Keyword(s):  
Economic Growth ◽  
Negative Impact ◽  
Panel Data Analysis ◽  
Financial Sector ◽  
Political Regime ◽  
Large Individual ◽  
Technological Advancement ◽  
Direct Impact ◽  
Indirect Impact ◽  
Sector Performance

Economic growth depends on many factors like the traditional factors of capital, labour and technological advancement and the somewhat novel factors of financial development and the nature of political regime. The relationship between the nature of political structure and economic growth is quite complicated. There may be direct and indirect impacts of the nature of political set up on economic growth. However, these channels remain un-explored to larger extent. The present study is conducted to analyse economic growth under democracy and dictatorship for a considerably larger set of countries from 1974 to 2013. The indirect impact of democracy on economic growth is analysed through an unexplored channel of financial sector performance, which is expected to be sensitive to regime type. The direct impact of democracy is found to be positively significant on economic growth. Likewise, direct impact of financial sector performance on economic growth is also found to be positive and significant. However, democracy had negative indirect impact on economic growth through financial sector but the magnitude of this indirect negative impact is minute enough to be ignored as compared to large individual direct effects of democracy and financial sector. JEL Classification: O40, O43, O16 Keywords: Economic Growth, Democracy, Dictatorship, Financial Sector Performance

scholarly journals Analisis Kausalitas antara Sektor Keuangan dan Pertumbuhan Ekonomi di Indonesia

2010 ◽  
Vol 10 (2) ◽  
pp. 143-158
Author(s):  
Ghozali Maski
Keyword(s):  
Economic Growth ◽  
Stock Market ◽  
Granger Causality ◽  
Market Value ◽  
Financial Sector ◽  
Causality Test ◽  
Vector Error Correction ◽  
Real Gdp ◽  
Private Credit ◽  
Using Data

The economic growth of the country is inseparable from the development of its financial sector. Therefore, this research attempted to prove the existence of causality between financial sector and economic growth in Indonesia using data between Q1 of 1996 to Q4 of 2006. The variables used as proxy for financial sector are monetization, private credit, total deposits, stock market capitalism, and stock market value traded—while the real GDP is used as a proxy for economic growth. This research aims to determine which variable is the most dominant influence in the shock given in causality result.This research methodology used Vector Error Correction Model (VECM) and Granger causality. VECM is used to find out the dominant variable that gave shock, while Granger causality is used to detect the causality between variables. Granger causality test shows the existence of one way causality between real GDP and private credit, total deposit, and stock market value traded. These causalities come from three sources. First, from real GDP to private credit; second, from real GDP to stock market value traded; and the last, from total deposit to real GDP. Meanwhile, VECM test shows the result that the economic growth can be a boosting factor for Indonesian financial sector growth. Moreover, the dominant variable in creating shock on economic growth is stock market value traded.The Granger causality estimation shows that there are one-way causalities between real GDP and private credit, total deposit, and stock market value traded.

scholarly journals The Causality Variables of Financial Sector Deepening to Economic Growth in Indonesia 1986 - 2015

2018 ◽  
Vol 7 (3) ◽  
pp. 314-321
Author(s):  
Pramesti Widiya Astuti
Keyword(s):  
Economic Growth ◽  
Granger Causality ◽  
Financial Sector ◽  
Annual Data ◽  
Causality Test ◽  
International Debt ◽  
Long Run ◽  
Fixed Capital Formation ◽  
Negative Effect ◽  
Private Credit

This study aims to examine the causality and role as the variables of the financial sector deepening with economic growth in Indonesia. The test of causality in this research acres using heading Granger Causality Test and VECM test. The tests are conducted using annual data from 1986 to 2015. The result of research using heading Granger Causality shows that there is no causality between M2 ratio with economic growth. While the ratio of private credit by deposit money banks and gross fixed capital formation ratio has a one-way causality with economic growth. The ratio of total outstanding international debt securities with economic growth has bidirectional causality. Based on the results of VECM in the long run, the ratio of private credit by deposit money bank has a negative effect on economic growth and the ratio of total outstanding international debt securities has negative effect and not significant on GDP.

Financial development, oil dependence and economic growth

2017 ◽  
Vol 34 (2) ◽  
pp. 281-298 ◽  
Author(s):  
Ramez Abubakr Badeeb ◽  
Hooi Hooi Lean
Keyword(s):  
Economic Growth ◽  
Granger Causality ◽  
Financial Development ◽  
Granger Causality Test ◽  
Financial Sector ◽  
Causality Test ◽  
Content Type ◽  
The Government ◽  
The Impact ◽  
The Relationship

Purpose This paper aims to examine the validity of the question of whether oil dependence has a negative impact on the relationship between financial development and economic growth in Yemen. Design/methodology/approach The auto-regressive distributed lag approach for cointegration is used to examine the relationship between financial development and economic growth by capturing the impact of oil dependence on this relationship. The Granger causality test, based on a vector error correction model (VECM) framework, is used to investigate the causal relationships between financial development and economic growth. Findings The most interesting finding is the negative sign of interaction term between financial development and oil dependence, which implies that the positive effect of financial development on economic growth decreases with the increasing oil dependence. The result of the VECM Granger causality test revealed the existence of unidirectional causality running from financial development to economic growth. Research limitations/implications The short sample period and the worry of losing degrees of freedom limited us when including control variables in the model. If the data are available in the future, other control variables can be added. Practical implications The government should reduce the level of oil dependence in Yemen by diversifying the country’s economy. Accelerating the pace and efficiency of the financial sector will bear fruitful returns in this regard. The government could achieve this strategy by playing a more proactive role in encouraging the expansion of credit to enable the financial sector to provide a more efficient intermediary role in mobilizing domestic savings and channeling them to productive investments across various economic sectors. Originality/value This is the first study to examine the impact of oil dependence on the finance-growth nexus in Yemen. A new indicator for oil dependence is also proposed.

Tax revenue and economic growth in developing country: an autoregressive distribution lags approach

2020 ◽  
Vol 7 (54) ◽  
pp. 205-217
Author(s):  
Mnaku Honest Maganya
Keyword(s):  
Economic Growth ◽  
Granger Causality ◽  
Testing Procedure ◽  
Gdp Growth ◽  
Bounds Testing ◽  
Causality Test ◽  
Significance Level ◽  
Distributed Lag ◽  
Distributed Lag Model ◽  
The Government

AbstractTanzania, like most other developing countries, faces numerous economic challenges in striving to achieve sustainable economic growth and development through taxation. In the literature, the debate on how effective taxes are as a tool for promoting economic growth and economic development remains inconclusive, as various research have reported mixed effects of tax on economic growth. This article investigates the effect of taxation on economic growth in Tanzania using the recently developed technique of autoregressive distributed lag model (ARDL) bounds testing procedure for the period from 1996 to 2019. Various preliminary tests were conducted including stationary tests as well as the pair-wise Granger causality test. According to the results obtained, domestic goods and services (TGS) taxes are positively related to GDP growth and are statistically significant at 1% level. Income taxes, on the other hand, were found to be negatively related to GDP growth and to be statistically significant at 5% level. The pair-wise Granger causality results indicated that there is bidirectional Granger causality between TGS and GDP growth at 1 % significance level. The government should aim at growing, nurturing and sustaining tax base to positively drive economic growth even further.

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