scholarly journals Macroeconomic variables and banking sector development: Evidence from Nigeria

2020 ◽  
Vol 8 ◽  
pp. 288-301
Author(s):  
Ojo Johnson Adelakun ◽  
Babatunde Afolabi ◽  
Uwasejike B Abuh
Keyword(s):  
Interest Rates ◽  
Money Supply ◽  
Banking Sector ◽  
Time Series Data ◽  
Oil Price ◽  
Series Data ◽  
Macroeconomic Variables ◽  
Long Run ◽  
Banking Sector Development ◽  
Bound Test

The study assessed the relationship between Macroeconomic Variables and Development in the Nigerian Banking Sector using annual time series data. Models were specified using Ratio of Credits to Private Sector to Gross Domestic Product (GDP) as a proxy for Banking Sector Development. At the same time, GDP growth rate, Poverty, Exchange Rate, Oil Price, Poverty, Money Supply, Inflation, and Interest rates were the selected Macroeconomic Variables used in the study. Data used were sourced from the Statistical Bulletin of Central Bank of Nigeria (CBN) for various editions and estimated using ARDL Bound Test and Vector Error Correction Mechanism (VECM). The study found that there exists a long-run relationship between Macroeconomic Variables selected and Banking Sector Development. The VECM coefficients revealed that all variables except Interest Rates have negative effects on Banking Sector Development. The VECM (-1), which showed the speed of adjustment, was rightly signed and significant, indicating a long-run causality relationship running from macroeconomic variables to banking sector development. The Impulse response from restricted VAR revealed that Banking Sector responded to the Macroeconomic Variables of which GDPGR and INT were transmitting negatively to Banking Sector Development while others were transmitting positive impulses. However, the variance decomposition found that oil price, followed by GDPGR and poverty, caused more variation in Banking Sector Development. In contrast, inflation and money supply caused the least variation in Banking Sector Development. The study, therefore, concluded that selected Macroeconomic Variables have a significant long-run relationship with Banking Sector Development. It is therefore recommended, among others that, Macroeconomic indicators should be well monitored and controlled using macroeconomic instruments promptly since when they are well managed would lead to a better developed Banking Sector in Nigeria.

scholarly journals BANKING SECTOR LIBERALIZATION AND ECONOMIC GROWTH: CASE STUDY OF PAKISTAN

2016 ◽  
Vol 17 (1) ◽  
pp. 125-139 ◽  
Author(s):  
Najia SAQIB
Keyword(s):  
Economic Growth ◽  
Banking Sector ◽  
Time Series Data ◽  
Series Data ◽  
Omitted Variables ◽  
Financial Systems ◽  
Long Run ◽  
Banking Sector Development ◽  
The Impact

Economic theory suggests that sound and efficient financial systems channel capitals to its most productive uses are beneficial for economic growth. Sound and efficient financial systems are especially important for sustaining growth in developing countries. This paper examines the impact of banking sector liberalization on long-term economic growth in Pakistan by using a time series data for the period 1971–2011. The results show that there exist a significant positive long run relationship between banking sector development and economic growth in the country. The sensitivity analysis also shows that the relationship remain positive and significant no matter what combination of the omitted variables are used in the basic model. Thus, our findings support the core idea that banking sector development stimulates long term economic growth in a country.

scholarly journals The Impact of Macroeconomic variables on the credit provided by Saudi Banks: تأثير المتغيرات الاقتصادية الكلية على التمويل المصرفي في المملكة العربية السعودية (دراسة قياسية شملت البيانات من 1970م – 2012م)

2019 ◽  
Vol 3 (3) ◽  
Author(s):  
Eyas Jafar Abdel Rahim
Keyword(s):  
Banking Sector ◽  
Time Series Data ◽  
Positive Impact ◽  
Government Expenditure ◽  
Series Data ◽  
Macroeconomic Variables ◽  
Distributed Lag ◽  
Bank Deposits ◽  
Long Run ◽  
The Impact

The study aimed to examine the impact of macroeconomic variables of the Saudi economy as in Gross Domestic Product (GDP), Government Expenditure (G), Economic Openness (OPE), Inflation Rate (CPI) and the Bank Deposits (DS) on the credit provided by Saudi banks (BF), on annual time series data between 1970-2012. To investigate this relationship, the study used Autoregressive Distributed Lag method (ARDL) to measure the long-run and short-run impact, At that the E-views 8.1 has been used for analyze the cointegration,the diagnostic, the reliability - stability tests, and the forecasting behavior of the model. The study found that (BF) is affected positively by (GDP) growth rate in the long-run. Also the (BF) has been affected negatively in the short and long-run by inflation rates (CPI) and government expenditure (G). Consequently the Contractionary Fiscal Policy in recent period will not lead to reduce the financial performance of Saudi banks, and the growth of (GDP) in the future will have positive impact on the financing capacity of the Saudi banking sector.

scholarly journals The Impact of Macroeconomic Factors on Manufacturing Sector Value Added in Ethiopia: An Application of Bounds Testing Approach to Cointegration

2020 ◽  
Vol 23 (1) ◽  
Author(s):  
Dagim Tadesse Bekele ◽  
Meskerem Teka Haile
Keyword(s):  
Exchange Rate ◽  
Time Series Data ◽  
Manufacturing Sector ◽  
Government Expenditure ◽  
Value Added ◽  
Series Data ◽  
Macroeconomic Variables ◽  
Long Run ◽  
The Impact ◽  
Bound Test

The role of the manufacturing sector for the economic growth and structural change is very low in Ethiopia and performing less compering with that of the other sectors in the economy. So, this research tried to look at how different macroeconomic variables affect the manufacturing sector value added by using annual time series data from 1982 to 2018 estimated by Autoregressive-Distributed Lag (ARDL). The result from the Bound test shows manufacturing sector value added has a long-run relationship with macroeconomic variables in the model. In the long-run, general inflation rate, exchange rate, and trade openness have a significant negative effect on the manufacturing sector value-added. In contrast, general government expenditure has a significant positive effect. Also, the Error Correction model shows an adjustment towards the long-run equilibrium of the manufacturing sector value-added. So, the government has to control the general inflation level, promote demand for domestic manufacturing products and competitiveness of domestic firms, and strengthen the backward link of the sector to decrease its import-input dependency to reduce the effect of exchange rate depressions. Lastly, effective and efficient government expenditure will have to be used to increase the manufacturing sector value-added.

scholarly journals The Dynamics of The Rupiah Exchange Rate in 2017-2020

2020 ◽  
Vol 5 (2) ◽  
pp. 1
Author(s):  
Muhammad Arief Aldila Susanto ◽  
Rr. Retno Retno Sugiharti
Keyword(s):  
Exchange Rate ◽  
Interest Rates ◽  
Money Supply ◽  
Foreign Exchange ◽  
Time Series Data ◽  
Series Data ◽  
Foreign Exchange Reserves ◽  
Long Run ◽  
Short Run ◽  
The Exchange Rate

<p align="justify">The exchange rate is one of the most important indicators in the economy. Moreover, with the increasing intensity of trade between countries, commonly referred to as international trade, this economic indicator becomes important for every country, including Indonesia. The change in the Indonesian exchange rate system to a free-floating system has made the exchange rate fluctuations more dynamic. The fluctuations are influenced by various factors, both internal and external. This study aims to determine the effect of the money supply (M<sub>2</sub>), foreign exchange reserves, SBI interest rates and world crude oil prices on the rupiah/dollar exchange rate in 2017-2020 both in the short run and in the long run. The data used is monthly time series data from 2017-2020. The analytical method used in this study is the Error Correction Model (ECM). The results in this study indicate that in the short run and long run the money supply and foreign exchange reserves variables have a significant effect on the rupiah exchange rate in 2017-2020.</p>

Impact of exchange rate and oil price on the yield of sovereign bond and sukuk: Evidence from Malaysian capital market

2017 ◽  
Vol 5 (4) ◽  
pp. 27
Author(s):  
Huda Arshad ◽  
Ruhaini Muda ◽  
Ismah Osman
Keyword(s):  
Exchange Rate ◽  
Capital Market ◽  
Time Series Data ◽  
Oil Prices ◽  
Oil Price ◽  
Series Data ◽  
Sovereign Bond ◽  
Long Run ◽  
Short Run ◽  
The Impact

This study analyses the impact of exchange rate and oil prices on the yield of sovereign bond and sukuk for Malaysian capital market. This study aims to ascertain the effect of weakening Malaysian Ringgit and declining of crude oil price on the fixed income investors in the emerging capital market. This study utilises daily time series data of Malaysian exchange rate, oil price and the yield of Malaysian sovereign bond and sukuk from year 2006 until 2015. The findings show that the weakening of exchange rate and oil prices contribute different impacts in the short and long run. In the short run, the exchange rate and oil prices does not have a direct relation with the yield of sovereign bond and sukuk. However, in the long run, the result reveals that there is a significant relationship between exchange rate and oil prices on the yield of sovereign bond and sukuk. It is evident that only a unidirectional causality relation is present between exchange rate and oil price towards selected yield of Malaysian sovereign bond and sukuk. This study provides numerical and empirical insights on issues relating to capital market that supports public authorities and private institutions on their decision and policymaking process.

Relationship between Budget Deficit and Economic Growth: Evidence from Ethiopia

2021 ◽  
Vol 2 (2) ◽  
pp. 10-15
Author(s):  
Desalegn Emana
Keyword(s):  
Economic Growth ◽  
Interest Rates ◽  
Budget Deficit ◽  
Time Series Data ◽  
Negative Impact ◽  
Positive Impact ◽  
Negative Relationship ◽  
Nominal Exchange Rate ◽  
Series Data ◽  
Long Run

This study examined the relationship between budget deficit and economic growth in Ethiopia using time series data for the period 1991 to 2019 by applying the ARDL bounds testing approach. The empirical results indicate that budget deficit and economic growth in Ethiopia have a negative relationship in the long run, and have a weak positive association in the short run. In line with this, in the long run, a one percent increase in the budget deficit causes a 1.43 percent decline in the economic growth of the country. This result is consistent with the neoclassical view which says budget deficits are bad for economic growth during stimulating periods. Moreover, in the long run, the variables trade openness and inflation have a positive impact on Ethiopian economic growth, and on the other hand, the economic growth of Ethiopia is negatively affected by the nominal exchange rate in the long run. Apart from this, in the long run, gross capital formation and lending interest rates have no significant impact on the economic growth of the country. Therefore, the study recommends the government should manage its expenditure and mobilize the resources to generate more revenue to address the negative impact of the budget deficit on economic growth.

scholarly journals The long-Run and Short-Run Analysis between Stock Market Index and Macroeconomic Variables in Jordan: Bounds Tests Approach

2019 ◽  
Vol 12 (4) ◽  
pp. 50
Author(s):  
Raed Walid Al-Smadi ◽  
Muthana Mohammad Omoush
Keyword(s):  
Stock Market ◽  
Time Series Data ◽  
Stock Exchange ◽  
Series Data ◽  
Stock Market Index ◽  
Macroeconomic Variables ◽  
Market Index ◽  
Long Run ◽  
Equilibrium Relationship ◽  
Short Run

This paper investigates the long-run and short-run relationship between stock market index and the macroeconomic variables in Jordan. Annual time series data for the 1978&ndash;2017 periods and the ARDL bounding test are used. The results identify long-run equilibrium relationship between stock market index and the macroeconomic variables in Jordan. Jordanian policy makers have to pay more attention to the current regulation in the Amman Stock Exchange(ASE) and manage it well, thus ultimately helping financial development.

scholarly journals Analysis The Effect of Electronic Money Use on Velocity of Money: Evidence from Indonesia

2020 ◽  
Vol 5 (1) ◽  
pp. 42
Author(s):  
Sufi Azhari Pambudi ◽  
M. Khoerul Mubin
Keyword(s):  
Interest Rates ◽  
Quantitative Research ◽  
Time Series Data ◽  
Series Data ◽  
Research Approach ◽  
Electronic Money ◽  
Correction Model ◽  
Income Levels ◽  
Long Run ◽  
Velocity Of Money

This study aims to examine the effect of electronic money transactions on the velocity of money in Indonesia. This study uses a quantitative research approach using quarterly time series data for the 2010q1-2018q4 period. Using variable velocity obtained from Gross Domestic Product (GDP) divided by M2, electronic money transactions, GDP per capita, and interest rates using the Error Correction Model (ECM) method. The results show that in the long run variable electronic money transactions, income levels and interest rates are significantly positive. In the short term, interest rates and income levels are significantly positive, while electronic money transactions only have a slight effect on the velocity of moneyin Indonesia.

scholarly journals An econometric analysis of the effectiveness of fiscal and monetary policies in India

2021 ◽  
Author(s):  
Anand Nadar
Keyword(s):  
Economic Growth ◽  
Monetary Policy ◽  
Fiscal Policy ◽  
Money Supply ◽  
Series Data ◽  
Monetary Policies ◽  
Indian Economy ◽  
Long Run ◽  
Short Run ◽  
Bound Test

This study investigatesthe effectiveness of fiscal policy and monetary policy in India. We collected thetime series data for India ranging from 1960 to 2019 from World Development Indicator (WDI). Weapplied the bound test co-integration approach to check the long-run relationship between fiscalpolicy, monetary policy, and economic growth in the context of Indian economy. The short-run andlong-run effects of fiscal policy and monetary policy have been estimated using ARDL models. Theresults showed that there is a long-run relationship between fiscal and monetary policies witheconomic growth. The estimated short-run coefficients indicated that a few immediate short runimpacts of fiscal and monetary policies are insignificant. However, the short-run impacts becomesignificant as time passes. The long-run results suggested that the long-run impact of both fiscal andmonetary policies on economic growth are positive and significant. More specifically, the GDP levelincreases if the money supply and government expenditure increase (Expansionary fiscal andmonetary policies). On the other hand, the GDP level decreasesif the money supply and governmentexpenditure decrease (contractionary fiscal and monetary policies). Therefore, this studyrecommends to use expansionary policies to spur the Indian economy.

scholarly journals The impact of bank-specific and macroeconomic variables on profitability of Islamic rural bank in Indonesia

2019 ◽  
Vol 5 (3) ◽  
Author(s):  
Muhammad Sanusi
Keyword(s):  
Banking Sector ◽  
Time Series Data ◽  
Series Data ◽  
Estimation Model ◽  
Policy Makers ◽  
Vector Error Correction ◽  
Macroeconomic Variables ◽  
Vector Error ◽  
The Impact

This paper investigates the impact of bank-specific and macroeconomic variables on the profitability of Islamic rural bank (BPRS) in Indonesia. Using monthly time series data from January 2010 - December 2018. The estimation model used is a vector error correction model to analyze the long-term and short-term relationships between bank-specific and macroeconomic variables on the profitability of Islamic rural bank. The results showed that CAR and LnTA had a significant positive relationship, while NPF, BOPO and IPI had a negative and significant relationship to the profitability of Islamic rural banks. But FDR and Inflation variables are not significantly related to the profitability of Islamic rural bank. The results leave implications for policy makers, investors and banking sector managers. Based on evidence that bank profitability is more influenced by internal banks (as specific as banks), this research can help Islamic rural banks to help them understand which factors are important to be analyzed to obtain higher profitability.

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