Re-examining the Impact of Financial Development on the Economic Growth of North Cyprus Through the Moderating Role of the Education Sector

2020 ◽  
Author(s):  
Nuru Giritli ◽  
Demet Beton Kalmaz
Keyword(s):  
Economic Growth ◽  
Causal Relationship ◽  
Financial Development ◽  
Unit Root Test ◽  
Education Sector ◽  
Causality Test ◽  
Financial Depth ◽  
Multiplier Effect ◽  
Sustainable Economic Growth ◽  
The Impact

Abstract This study examines the impact of financial development on economic growth with the multiplier effect of the higher education by employing yearly data covering the years between 1990 and 2018 measured in TL. The results reached could shape the policies in achieving sustainable economic growth. Co-integration between the series are tested with ARDL based bounds test; since Zivot-Andrews structural unit root test results showed that variables are integrated at different orders. Furthermore, FMOLS and DOLS are applied to check for robustness. Moreover, Toda-Yamamoto Causality test is employed to test for the causal relationship between the series. Results show that there is a bidirectional causal relationship between financial depth and economic growth; and unidirectional causal relationships from money supply to financial depth, from economic growth and financial depth to education sector. Diagnostic and stability tests results confirm the reliability and stability of the parameters of the model employed.

scholarly journals Interest Rate Deregulation, Bank Development And Economic Growth In South Africa: An Empirical Investigation

2010 ◽  
Vol 9 (11) ◽  
Author(s):  
Nicholas M Odhiambo
Keyword(s):  
Economic Growth ◽  
South Africa ◽  
Interest Rate ◽  
Causal Relationship ◽  
Financial Development ◽  
Positive Impact ◽  
Strong Support ◽  
Prima Facie ◽  
Financial Depth ◽  
The Impact

In this paper the dynamic relationship between interest rate reforms, bank-based financial development and economic growth is examined – using two models in a stepwise fashion. In the first model, the impact of interest rate reforms on financial development is examined using a financial deepening model. In the second model, the dynamic causal relationship between financial development and economic growth is examined, by including investment as an intermittent variable in the bi-variate setting, thereby creating a simple tri-variate causality model. Using cointegration and error-correction models, the study finds strong support for the positive impact of interest rate reforms on financial development in South Africa. However, contrary to the results from some previous studies, the study finds that financial development, which results from interest rate reforms, does not Granger cause investment and economic growth. In addition, the study finds a uni-directional causal flow from investment to financial development and prima-facie causal flow from investment to growth. The study, therefore, concludes that although interest rate reforms impact positively on financial depth in South Africa, the causal relationship between financial depth and economic growth tends to take a demand-following path. Moreover, given the causal flow from investment to financial development and a prima facie causal flow from investment to growth, it is likely that the economic development in South Africa is driven largely by the growth of the real sector rather than the financial sector.

scholarly journals The drivers of economic growth in China and India: globalization or financial development?

2017 ◽  
Vol 16 (1) ◽  
pp. 54-84 ◽  
Author(s):  
Magda Kandil ◽  
Muhammad Shahbaz ◽  
Mantu Kumar Mahalik ◽  
Duc Khuong Nguyen
Keyword(s):  
Economic Growth ◽  
Financial Development ◽  
Emerging Market ◽  
Annual Data ◽  
Test Results ◽  
Causality Test ◽  
Content Type ◽  
China And India ◽  
Integration Test ◽  
The Impact

Purpose Using annual data from 1970 to 2013 for China and India, this paper aims to examine the impact of globalization and financial development on economic growth by endogenizing capital and inflation and drawing comparisons between the two fastest growing emerging market economies. Design/methodology/approach In the long run, co-integration test results indicate that financial development increases economic growth in China and India. Findings The results also reveal that globalization accelerates economic growth in India but, surprisingly, impairs economic growth in China, as it increases competition for exports. The results furthermore disclose that acceleration in capitalization and inflation, as a proxy for aggregate demand, are positively linked to economic growth in China and India. Originality/value Causality test results indicate that both financial development and economic growth are interdependent. In contrast, causality runs from higher economic growth to increased globalization in India, while the results do not support long-term causality between globalization and economic growth in China.

scholarly journals Higher Education Funding and Economic Growth: Empirical Evidence from Croatia

2020 ◽  
Vol 67 (3) ◽  
pp. 409-421
Author(s):  
Maja Nikšić Radić ◽  
Hana Paleka
Keyword(s):  
Higher Education ◽  
Economic Growth ◽  
Structure Model ◽  
Higher Education Funding ◽  
Causality Test ◽  
Economic Growth And Development ◽  
Social And Economic Development ◽  
Sustainable Economic Growth ◽  
The Impact ◽  
Growth Hypothesis

Deprived of investment in education, no country can expect sustainable economic growth and development. Higher education is particularly a priceless tool in today's era of globalization that requires continuous education to keep up with new knowledge. According to UNESCO (2014), higher education is no longer a luxury; it is essential to national, social and economic development. The impact of education on economic growth is possible to observe within the so-called ‘education led growth hypothesis’. The main aim of this paper it to analyse the higher education size and structure, model and financing sources in Croatia and to test the ‘education led growth hypothesis’ on the example of Croatia. The study will apply the Granger causality test to evaluate if there is any causal relationship between investment in higher education and economic growth in Croatia.

scholarly journals Financial Development and Economic Growth: Time Series Analysis of Economy of Pakistan

2018 ◽  
Vol 5 (2) ◽  
pp. 59
Author(s):  
Muhammad Shoukat Malik ◽  
Raisham Hayee ◽  
Raima Adeel
Keyword(s):  
Economic Growth ◽  
Time Series ◽  
Time Series Analysis ◽  
Causal Relationship ◽  
Financial Development ◽  
Granger Causality Test ◽  
Growth Time ◽  
Annual Data ◽  
Causality Test ◽  
Stationary Level

This study aims in understanding the causal relationship between financial development and economic growth. This research used annual data and applied dickey fuller test and granger causality test in order to understand stationary level and causation in variables. The results of this test give support to first hypothesis that financial development causes economic growth. While no evidence was found on the support of our second hypothesis i.e. economic growth is causing financial development.

Contribution of StockMarket Towards Economic Growth: An Empirical Study on Bangladesh Economy

2017 ◽  
Vol 13 (4) ◽  
pp. 238 ◽  
Author(s):  
Sonia Rezina ◽  
Nusrat Jahan ◽  
Mohitul Ameen Ahmed Mustafi
Keyword(s):  
Economic Growth ◽  
Stock Market ◽  
Market Performance ◽  
Unit Root Test ◽  
Causality Test ◽  
Stock Market Development ◽  
Stock Market Performance ◽  
Augmented Dickey Fuller ◽  
Johansen Cointegration Test ◽  
The Impact

The economic growth of a country is influenced by many different factors. This study aims to investigate the causal relationship between stock market development and economic growth in Bangladesh as well as the impact of stock market performance upon the economic growth of Bangladesh. The stock market performance has been measured by market capitalization ratio, number of listed companies, total value traded and turnover ratio; and the economic growth was represented by real gross domestic product. The periods taken for study were from year 1994 to year 2015.The effect of the stock market reform will also be addressed to explain the relationship. The study has been conducted using Augmented Dickey- Fuller Unit Root Test, Johansen Cointegration Test and the Granger Causality Test. The findings of the research should help the policy makers and regulators to look after their interest in the financial sector of the country.

Regional Differences between China's Telecom Industry Development and Economic Growth - an Empirical Study Based on Eastern and Western Panel Data

2013 ◽  
Vol 411-414 ◽  
pp. 2410-2416
Author(s):  
Huan Wang ◽  
Zeng Min Wang ◽  
Qi Ling Xie
Keyword(s):  
Economic Growth ◽  
Panel Data ◽  
Causal Relationship ◽  
Eastern China ◽  
Unit Root Test ◽  
Dynamic Panel Data ◽  
Differential Method ◽  
Western China ◽  
Causality Test ◽  
Telecom Industry

Through establishing a dynamic panel data model and based on panel data which were calculated at 2000 constant prices from 2000 to 2011 of 23 provinces in the eastern and western China, this paper studies the causal relationship between telecommunications development and economic growth of eastern and western China, using the method of unit root test, the differential method and Granger causality test. The empirical results show that there is a causal relationship from gross regional product to the direction of the telecom business volume in the eastern China, but not in the western. This result means that the improvement of telecommunications infrastructure is not enough to stimulate local economic growth, while the western region's economic growth is not significantly driven by the development of the local telecom industry as well.

The state's role in promoting Nigerian financial development and economic growth

2014 ◽  
Vol 41 (5) ◽  
pp. 380-396 ◽  
Author(s):  
Godfrey Chidozie Uzonwanne
Keyword(s):  
Economic Growth ◽  
Causal Relationship ◽  
Financial Development ◽  
Developing Economies ◽  
The State ◽  
Cointegration Analysis ◽  
Developing Economy ◽  
Social Implication ◽  
Content Type ◽  
The Impact

Purpose – The purpose of this study is to propose a framework for conceptualizing the finance-growth theory in developing economies. Design/methodology/approach – The study uses a cointegration and error correction model to investigate the possible influence of key socio-political characters of a state on the causal relationship between financial development and economic growth. A developing economy (Nigeria) which had experienced decades of autocratic military governance was studied. Three characters of the state (ethnicity, civil war and military governance) were derived from a historical review and were introduced into the cointegration analysis as dummy variables. Findings – Evidence of a causal relationship was found to exist from financial development to economic growth and the characters of the state were found to have no significant impact on this relationship. Research limitations/implications – The research limitations were based on the reliability of data recorded between 1960 and 2007. Practical implications – This study is practical from the point of view of the integration of qualitative social disturbances into a quantitative model targeted at exploring the practical developmental impact these disturbances may have had and continue to have on economic growth. Social implications – The social implication of this study stems from the impact that adverse socio-political influences may have on financial development and economic growth. Originality/value – This is an original piece of research focused at understanding the unique social, political and macroeconomic circumstance of a strategically relevant developing economy.

scholarly journals Finance and economic growth nexus: evidence from Gansu province in China

2021 ◽  
Vol 275 ◽  
pp. 01007
Author(s):  
Changchuan Zhang
Keyword(s):  
Economic Growth ◽  
Financial Development ◽  
Time Series Data ◽  
Unit Root Test ◽  
Output Growth ◽  
Gansu Province ◽  
Series Data ◽  
Financial Efficiency ◽  
Causality Test ◽  
Integration Test

This study investigates the association between financial development and economic growth in the long run using the time series data from 1985 to 2018 in financially undeveloped Gansu province in China. Regarding methodology, this paper employs ADF unit root test, Johansen co-integration test, VECM and Granger causality test to analyze the long-term relationship. The outcomes signal that the variables of financial depth, financial efficiency and economic growth are co-integrated, and the level of total financial development is negatively correlated with economic growth while financial efficiency is positively associated with output growth. In addition, there is a two-way causation between each pair of variables.

scholarly journals Ecological Footprint, Public-Private Partnership Investment in Energy and Financial Development in Brazil: A Gradual Shift Causality Approach

2021 ◽  
Author(s):  
Gbenga Daniel Akinsola ◽  
Abraham Ayobamiji Awosusi ◽  
Dervis Kirikkaleli ◽  
Sukru Umarbeyli ◽  
Ibrahim Adeshola ◽  
...  
Keyword(s):  
Economic Growth ◽  
Renewable Energy ◽  
Financial Development ◽  
Ecological Footprint ◽  
Private Investment ◽  
Low Carbon ◽  
Causality Test ◽  
Public And Private ◽  
Gradual Shift ◽  
The Impact

Abstract The present study aims to close this gap in the literature by exploring the effect of public-private partnerships in energy and financial development on Brazil’s ecological footprint by considering the impact of renewable energy and economic growth using data spanning from 1983 to 2017. The study utilized several techniques such as ARDL, FMOLS, DOLS, and CCR to examine the relationship between ecological footprint and the determinants, while the Gradual shift causality test was utilized to capture the causal linkage between the series in the presence of structural break. The outcome of the Maki Cointegration test revealed evidence of a long-run association among the variables of interest. Furthermore, the results of the ARDL, FMOLS, DOLS, and CCR tests revealed that economic growth and public and private investment in energy increase environmental degradation while both renewable energy and financial development mitigates it. Moreover, the Gradual shift causality test revealed a bidirectional causal linkage between ecological footprint and economic growth. The present study recommends establishing a forum that will foster public and private partnerships to enhance communication, which will create collaboration for new initiatives for green technological innovations. Additionally, the financial market can be assisted by the government by formulating a framework that would promote low carbon technology development.

scholarly journals Technology and Economic Growth: Role of Financial Development in South Asian Countries

2019 ◽  
Vol 5 (2) ◽  
pp. 323-332 ◽  
Author(s):  
Imran Sharif Chaudhry ◽  
Samina Sabir ◽  
Fatima Gulzar
Keyword(s):  
Economic Growth ◽  
Financial Development ◽  
South Asian ◽  
Method Of Moment ◽  
Asian Countries ◽  
Development Technology ◽  
Generalized Method Of Moment ◽  
Sustainable Economic Growth ◽  
The Impact

Financial development plays an instrumental role in the process of economic growth and development through mobilization of savings and creating investment opportunities. Financial development also leads to enhance the level of technology by providing finance to entrepreneurs for technological innovations which leads to economic growth. This study examines the impact of financial development and technology on economic growth of selected South Asian countries over the time span 1984-2017. Due to endogeneity problem, the empirical model used in the study is estimated by System Generalized Method of Moment (System GMM). Empirical results indicated that financial development, technology and human capital have positive and significant impact on economic growth in developing South Asian countries. To attain a sustainable economic growth, South Asian countries should put their efforts to develop their financial market that stimulates economic growth by providing finance to entrepreneurs for innovations.

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