scholarly journals Financial Development and Economic Growth: Evidence from a Heterogeneous Panel of High Income Countries

2007 ◽  
Vol 12 (1) ◽  
pp. 1-34 ◽  
Author(s):  
A.R. Kemal ◽  
Abdul Qayyum Abdul Qayyum ◽  
Muhammad Nadim Hanif
Keyword(s):  
Economic Growth ◽  
Financial Development ◽  
Fixed Effects ◽  
Empirical Relationship ◽  
High Income ◽  
Causality Analysis ◽  
Panel Estimation ◽  
Panel Causality ◽  
Heterogeneous Panel ◽  
The Relationship

This paper examines the empirical relationship between financial development and economic growth for high income countries. The study focuses on both indirect finance and direct finance, separately as well as jointly. Applying the methodology of Nair-Reichert and Weinhold (2001) for causality analysis in heterogeneous panel data, two sets of results are reported. First, the evidence regarding the relationship between financial development and economic growth from a contemporaneous non-dynamic fixed effects panel estimation is mixed. Negative and statistically significant estimates of the coefficient of the inflation and financial development interaction variable indicate that financial sector development may even be harmful to economic growth when inflation is rising. Second, in contrast with the recent evidence of Beck and Levine (2003), heterogeneous panel causality analysis applied on a refined model indicates that there is no definite evidence that finance spurs economic growth or growth spurs finance. Most of our findings are in line with the Lucas (1988) view that the importance of financial matters is overstressed. The only exception is the case of activity in stock markets where our result supports the Robinson (1952) view that finance follows enterprise.

scholarly journals THE NEXUS BETWEEN TAX REFORMATION, FINANCIAL DEVELOPMENT AND ECONOMIC RECOVERY: THE CASE OF MALAYSIA

2018 ◽  
Vol 24 (3) ◽  
pp. 1258-1279 ◽  
Author(s):  
Roshaiza TAHA ◽  
Jūratė ŠLIOGERIENĖ ◽  
Nanthakumar LOGANATHAN ◽  
Izolda JOKŠIENĖ ◽  
Muhammad SHAHBAZ ◽  
...  
Keyword(s):  
Economic Growth ◽  
Financial Development ◽  
Global Economy ◽  
Time Series Data ◽  
Series Data ◽  
Tax Revenue ◽  
Causality Analysis ◽  
Annual Time Series ◽  
New Policies ◽  
The Relationship

The main purpose of this paper is to establish the plausibility and the dynamic nexus between financial developments, economic growth and tax revenue in Malaysia. The analysis of these relationships is vital considering the instability of the global economy which has affected growth. In this study, we employed annual time series data covering the period of 1970–2015. Using advanced co-integration and causality analysis, we found strong evidence on the relationship between each of the examined variables. The results from this study provide evidence on the taxes-growth nexus for Malaysia. An inverted U-shaped relationship is found between financial development and tax collection, while a U-shape reflects the economic condition. The nexus between economic growth and tax revenue enhances fiscal policies in the creation of transparent and mature financial systems which will further boost the collection of government revenues in Malaysia. The results of this study may provide an avenue for researchers and policymakers to understand the nature of the relationship between the examined variables and further assist in the formulation of new policies for economic sustainability.

scholarly journals The relationship between tourism and economic growth among BRICS countries: a panel cointegration analysis

2021 ◽  
Vol 7 (1) ◽  
Author(s):  
Haroon Rasool ◽  
Shafat Maqbool ◽  
Md. Tarique
Keyword(s):  
Economic Growth ◽  
Financial Development ◽  
Panel Cointegration ◽  
Cointegration Analysis ◽  
International Tourism ◽  
Causality Analysis ◽  
Panel Ardl ◽  
Brics Countries ◽  
Inbound Tourism ◽  
The Relationship

AbstractTourism has become the world’s third-largest export industry after fuels and chemicals, and ahead of food and automotive products. From last few years, there has been a great surge in international tourism, culminates to 7% share of World’s total exports in 2016. To this end, the study attempts to examine the relationship between inbound tourism, financial development and economic growth by using the panel data over the period 1995–2015 for five BRICS (Brazil, Russia, India, China and South Africa) countries. The results of panel ARDL cointegration test indicate that tourism, financial development and economic growth are cointegrated in the long run. Further, the Granger causality analysis demonstrates that the causality between inbound tourism and economic growth is bi-directional, thus validates the ‘feedback-hypothesis’ in BRICS countries. The study suggests that BRICS countries should promote favorable tourism policies to push up the economic growth and in turn economic growth will positively contribute to international tourism.

scholarly journals Financial development and economic growth in the CEPGL region: evidence based on panel data

2021 ◽  
Vol 39 (2) ◽  
Author(s):  
Alexis Nyamugira Biringanine ◽  
Kazamwali Mzee
Keyword(s):  
Economic Growth ◽  
Panel Data ◽  
Financial Development ◽  
Fixed Effects ◽  
Economic Status ◽  
Financial System ◽  
Fixed Effects Model ◽  
Correction Model ◽  
Bidirectional Relationship ◽  
The Relationship

This paper contributes to the huge debate on the relationship between financial development and the economic growth. The evidence is applied to the CEPGL (Communauté Economique des Pays des Grands Lacs) region. Previous studies have concluded either to the absence of connection between the two spheres, to a unidirectional or bidirectional relationship, or to a differentiated connection depending on the economic status of development of the country. The research design applied in this research has been inspired by the reality of the region by running an Error Correction Model for each country and a fixed effects model on panel data for the whole region. Therefore, we estimated econometric models from a series of macroeconomic data relating to the depth, and the accessibility of the financial system. The data used in this study range from 1976 to 2013. Insights from this study show that the financial system of the region is extremely underdeveloped, a weak connection between the financial and the economic sphere, in addition to an ambivalent sense of causality. 

scholarly journals Analysis of the Relationship between Financial Development, Employment and Institutions on Economic Growth in WAEMU Countries

2020 ◽  
Vol 7 (12) ◽  
pp. 267-291
Author(s):  
Firmin Ayivodji ◽  
Rémy Hounsou ◽  
Emmanuel Tago
Keyword(s):  
Economic Growth ◽  
Financial Development ◽  
Fixed Effects ◽  
Employment Level ◽  
Pooled Mean Group ◽  
Spatial Autoregressive ◽  
Spatial Autoregressive Models ◽  
The One ◽  
The Relationship

This study analyzes the relationship between financial development and economic growth on the one hand and the link between employment level and economic growth on the other hand in the context of financial liberalization. Also the question of the role of the institutional factors in the facilitation of the credit granting in the eight (08) countries of the WAEMU is approached. In doing so, strategies based on conventional fixed effects methods, with correction of Driscoll-Kraay (1998), Pooled Mean Group (PMG) of Pesaran et al. (1995, 1999) and spatial autoregressive models (SAC) are used to estimate the different equations over the period 1990-2015. The results suggest that financial development is positively associated with economic growth in WAEMU countries while an improvement in the level of employment stifles economic development. The results show that there is a positive and significant correlation between quality of democratic institutions and economic growth whatever the indicators of financial development considered except the money supply. The study recommends a strengthening of the financial development with a possible greater regularity.

scholarly journals Financial Development and Economic Growth: Evindence From Azerbaijan

2021 ◽  
Vol 18 ◽  
pp. 237-252
Author(s):  
Ilkin Mammadov ◽  
Azerbaijan Fariz Ahmadov
Keyword(s):  
Economic Growth ◽  
Financial Markets ◽  
Financial Development ◽  
Financial Crises ◽  
Model Estimation ◽  
Causality Analysis ◽  
Economic Activities ◽  
Monthly Data ◽  
The Impact ◽  
The Relationship

The impact of financial development on economic growth has always been an important issue. Especially when financial crises occur, the relationship between financial markets and financial crises and economic activities is on the agenda. The main purpose of this study is to determine the relationship between financial development and economic growth in the Azerbaijani economy. For this purpose, VECM model estimation and Granger causality analysis was performed by taking monthly data between 2005-2019. As a result of the analysis, it was revealed that there is a two-way relationship between financial development and economic growth in Azerbaijan

scholarly journals A panel causality analysis of the relationship between financial development and economic growth in OECD countries

2021 ◽  
Vol 9 (2) ◽  
pp. 662-672
Author(s):  
Sevilay Küçüksakarya
Keyword(s):  
Economic Growth ◽  
Private Sector ◽  
Financial Development ◽  
Gdp Growth ◽  
Causality Test ◽  
Panel Causality ◽  
Per Capita Gdp ◽  
Domestic Credit ◽  
Per Capita ◽  
The Relationship

This study examines the relationship between financial development and economic growth. Thus, this study aims to find empirical shreds of evidence for the direction of the causality between financial development proxied by domestic credit to the private sector and per capita GDP growth by using the panel granger causality test of the Dumitrescu-Hurlin Test. For this purpose, we used a panel of 16 OECD countries from 2008 to 2019 to provide evidence of whether the supply leading hypothesis or demand following hypothesis or both holds. All econometric exercises are carried out for whole countries and high-income countries, and upper-middle-income country groups in the sample. Due to cross-sectional dependence among the sample countries, we determine the degree of integration of each variable by employing the second-generation panel unit root tests of CIPS. We continue our analysis with the panel causality test developed by Dumitrescu and Hurlin (2012) to determine the direction of the causality between variables. For this purpose, we performed three sets of causality analyses. In the first one, we include all countries in the panel. We then divided the countries into two sub-groups based on the income classification and the level of financial development in these countries proxied by domestic credit to the private sector. The causality test results, including all countries in the sample, indicate that the hypothesis holds the supply leading hypothesis during the sample period. This means that even though this panel contains countries with a development level, financial development still seems to be a pre-condition for economic growth for these nations. We also obtain the same results when we include high-income countries in the sample. The study results provide compelling evidence for the relationship between economic growth and financial development since the sample includes countries with different levels of financial development with different degrees of per capita GDP growth.

scholarly journals The Relationship of Economic Growth And Terrorism with the Human Development Index: A Causality Analysis on MENA Countries

2020 ◽  
Vol 11 ◽  
pp. 226-234
Author(s):  
Günay Özcan ◽  
Cigdem Karter
Keyword(s):  
Economic Growth ◽  
Human Development ◽  
Human Development Index ◽  
Causality Analysis ◽  
Panel Causality ◽  
Development Index ◽  
Mena Countries ◽  
Causality Relationship ◽  
Relationship Of ◽  
The Relationship

Examining the human development of societies is one of the important economic policy practices of recent times. Therefore, economies steer the sub-components of human development and their policies implemented by researching the factors that affect such sub-components. In this context, the aim of this study is to examine the relationship between economic growth and terrorism with human development in 12 selected MENA countries in the period of 2002-2017 by the panel causality method. The findings obtained as a result of the panel causality analysis show that both terrorism and economic growth have bidirectional causality with the human development index throughout the panel. A causality relationship has also been found in many countries on a country basis

Sign in / Sign up

Export Citation Format

Share Document