The Impact of Financial Deepening on Economic Growth in Jordan: Econometric Study (1980-2015)

2017 ◽  
Vol 5 (1) ◽  
pp. 35-53
Author(s):  
Ahmad Abdelkhaleq Ahmad Jabae ◽  
Ahmad Ibrahim Malawi
Keyword(s):  
Economic Growth ◽  
Interest Rates ◽  
Annual Data ◽  
Financial Deepening ◽  
Interest Rate Spread ◽  
Study Results ◽  
Stationary Test ◽  
The Impact ◽  
Integration Analysis

This study aimed to investigate the effect of financial deepening on the economic growth for the case of Jordan during the period of 1980-2016. To this end, the study used multiple econometric model based on Autoregressive Distribution Lag approach (ARDL) and co-integration analysis among the variables based on annual data. Philips-Perron (PP) test have been utilized for stationary test. The study results show that there is positive and significant effects between the financial deepening and economic growth when the amount of broad money supply/gross demostic product is used as proxy of financial deepening, and there are negative and significantly effects between financial deepening indicators were captured by interest rate spread, credit to the private sector, and negative insignificantly effects between commercial –central bank assests and economic growth. Based on the obtained results the study recommended to develop the  role of financial sectors to increase the degree of  financial deepening in the Jordanian economy, and directing the bank credit to the highly productive sectors, and reconsidering the interest rates on deposits and  loans to increase the financial deepening degree in the Jordanian economy.

The Impact of Financial Deepening on Economic Growth in Jordan: Econometric Study (1980-2015)

2017 ◽  
Vol 5 (1) ◽  
pp. 35-53
Author(s):  
Ahmad Abdelkhaleq Ahmad Jabae ◽  
Ahmad Ibrahim Malawi
Keyword(s):  
Economic Growth ◽  
Interest Rates ◽  
Annual Data ◽  
Financial Deepening ◽  
Interest Rate Spread ◽  
Study Results ◽  
Stationary Test ◽  
The Impact ◽  
Integration Analysis

This study aimed to investigate the effect of financial deepening on the economic growth for the case of Jordan during the period of 1980-2016. To this end, the study used multiple econometric model based on Autoregressive Distribution Lag approach (ARDL) and co-integration analysis among the variables based on annual data. Philips-Perron (PP) test have been utilized for stationary test. The study results show that there is positive and significant effects between the financial deepening and economic growth when the amount of broad money supply/gross demostic product is used as proxy of financial deepening, and there are negative and significantly effects between financial deepening indicators were captured by interest rate spread, credit to the private sector, and negative insignificantly effects between commercial –central bank assests and economic growth. Based on the obtained results the study recommended to develop the  role of financial sectors to increase the degree of  financial deepening in the Jordanian economy, and directing the bank credit to the highly productive sectors, and reconsidering the interest rates on deposits and  loans to increase the financial deepening degree in the Jordanian economy.

scholarly journals The Impact of Financial Deepening on Economic Growth in Nigeria (1981-2018)

2020 ◽  
Vol 17 ◽  
Keyword(s):  
Economic Growth ◽  
Private Sector ◽  
Interest Rates ◽  
Money Supply ◽  
Commercial Banks ◽  
Financial Sector ◽  
Financial Deepening ◽  
Growth Data ◽  
Main Research ◽  
The Impact

Different academics and experts have acknowledged that developing the financial sector positively impacts economic growth by increasing productivity, progress and national investment. Expanding the financial sector allows financial intermediaries to carry out functionalities of deploying, aggregating and directing a country’s savings into an investment which contributes to domestic progression. This research explores the effect of financial deepening on Nigeria’s growth for 38 years covering 1981- 2018. The main research goals were to investigate the linkages among time and savings deposit of commercial banks, money supply and credit to the private sector on the economy’s growth. Data was obtained from CBN Bulletin different issues and analyzed using Autoregressive Distributed Lag. From the result of analysis, we found out that long run relationship existed but no regressor was found to be significant. Credit to the private sector to GDP was inversely related to GDP growth whereas money supply to GDP had positive relations with economic growth rate, time and savings deposits in commercial banks negatively affected national growth. Policies favoring credit lending to the private sector should be encouraged by stakeholders in the economy, for instance, higher savings interest rates would encourage more savings. More importantly, policies should be enacted to make sure that savings are transmitted into productive investments that can yield financial deepness

scholarly journals Role of Zakat as Social Finance Catalyst to Islamic Banking and Economic Growth

2017 ◽  
Vol 2 (2) ◽  
pp. 55-70 ◽  
Author(s):  
Ai Nur Bayinah
Keyword(s):  
Economic Growth ◽  
Positive Impact ◽  
Islamic Banking ◽  
Annual Data ◽  
Impulse Response Functions ◽  
Islamic Banks ◽  
West Java ◽  
Vector Autoregressive ◽  
The Impact ◽  
Integration Analysis

This paper is aimed to assess the contribution of Zakat in boosting Islamic banks’ financing and economic growth for the period 2011-2015, in 10 district/city of West Java Province, Indonesia. Through Vector Autoregressive (VAR) panel co-integration analysis, variance decompositions (VD) and impulse response functions (IRF), this study investigates Zakat, Islamic Banking, and economic growth nexus. Findings in this research highlight that Zakat has a significant impact on Islamic banking, so this institution would contribute to economic growth both in the short and the long run, with fluctuation in variance from the first year. The results lend support to the view that Zakat not only leads to social benefits but also has a positive impact on the economy through increasing Islamic banks’ financing. Therefore, this research will serve as a motivation for the industry players and regulators to continuously promote Zakat as a strategic policy. The originality of this research is to assess Zakat-led growth and finance by analyzing the impact of Zakat on the Islamic banking and regional economic outcome. Another novel aspect of this study is in the methodology as it employs VAR panel co-integration analysis, VDs and IRFs on the set of annual data. Keywords: Zakat, Islamic Banking Financing, Economic Growth, West Java

scholarly journals The Role of FDI Inflow in Economic Growth: Evidence from Developing Countries

2021 ◽  
Vol 2 (1) ◽  
pp. 68-80
Author(s):  
Cao Liang ◽  
Salman Ali Shah ◽  
Tian Bifei
Keyword(s):  
Economic Growth ◽  
Developing Countries ◽  
Positive Relationship ◽  
Practical Implication ◽  
Least Square ◽  
Annual Data ◽  
World Economic ◽  
The Impact ◽  
The Relationship

Purpose: This study is carried out to study the relationship between FDI and economic growth of developing countries. Approach/ Methodology/ Design: The study used data from 2000 to 2019 for 113 developing and transition countries. The study used Hausman fixed effect and instrumental variables two stage least square region to trace the results. Findings: The result of the study found a positive relationship between FDI and economic growth. An increase in FDI inflow will result and upsurge in economic growth of developing country. The relationship between unemployment and economic growth is found negative. The overall results show that FDI and economic growth has a positive relationship in developing countries. Practical Implication: This study used annual data of pre pandemic. It is concluded in the study that future studies have to check the impact in post pandemic scenario. Originality/Value: Though the relationship between FDI and economic growth is studied widely in different studies. As mentioned that COVID-19 pandemic changed the world economic situation there is much more aspects of FDI and economic growth is remaining to study. The issue of FDI and economic growth for a cluster of 113 countries is addressed in this study.

scholarly journals Economic Growth, Poverty, Urbanization, and the Small and Medium Enterprises (SMEs) in Indonesia: Analysis of Cointegration and Causality

2021 ◽  
Vol 12 (2) ◽  
pp. 143-150
Author(s):  
Hadi Jauhari ◽  
Periansya Periansya
Keyword(s):  
Economic Growth ◽  
Small And Medium Enterprises ◽  
Secondary Data ◽  
First Year ◽  
Poor People ◽  
Annual Data ◽  
Intense Training ◽  
Medium Enterprises ◽  
The Impact

In Indonesia, poverty is still considered a serious problem, even though the number of poor people continues to decline significantly. The research aimed to investigate whether there was cointegration between the role of Small and Medium Enterprises (SMEs), economic growth, and poverty alleviation or not in Indonesia.  Secondary data were compiled from annual data in 2000-2019. Data analysis applied the cointegration test and Vector Error Correction Model (VECM) test. The results show a one-way causality between poverty and economic growth, urbanization and economic growth, the role of SMEs and economic growth, and the role of SMEs and poverty. In addition, the results of the VECM analysis suggest that the role of SMEs has a positive effect on poverty in the first year. It means that it takes a year to find out the impact of the increasing role of SMEs on poverty at the later stage. The research has several implications for government, namely: (i) compiling work programs that touch the community directly and strengthen the development of local wisdom products, (ii) conducting more intense training, (iii) emphasizing on improving the quality and standards of local wisdom products, and (iv) building rural infrastructure that can facilitate the economic processes in the village.

Remittances, Economic Growth and Poverty: A Case of African OIC Member Countries

2018 ◽  
Vol 57 (2) ◽  
pp. 121-143
Author(s):  
Nasim Shah Shirazi ◽  
Sajid Amin Javed ◽  
Dawood Ashraf
Keyword(s):  
Economic Growth ◽  
Financial Development ◽  
Poverty Reduction ◽  
Simultaneous Equation ◽  
Equation Model ◽  
Annual Data ◽  
Simultaneous Equation Model ◽  
African Countries ◽  
Alternative Source ◽  
The Impact

This paper investigates the impact of remittance inflows on economic growth and poverty reduction for seven African countries using annual data from 1992-2010. By using the depth of hunger as a proxy for poverty in a Simultaneous Equation Model (SEM), we find that remittances have statistically significant growth enhancing and poverty reducing impact. Drawing on our estimates, we conclude that financial development level significantly increases the remittances inflows and strengthens poverty alleviating impact of remittances. Results of our study further show a signficant interactive imapct of remittances and finacial develpment on economic growth, suggesting the substitutability between remittance inflows and financial development. We further find that 3 percentage point increase in credit provision to the private sector (financial development) can help eliminate the severe depth of hunger in the region. Remittances, serving an alternative source of private credit, can be effective in this regard. Keywords: Remittance Inflow, Poverty Alleviation, Financial Development, Simultaneous Equation Model

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 Financial system and growth and economic development

VUZF Review ◽  
2021 ◽  
Vol 6 (2) ◽  
pp. 160-170
Author(s):  
Małgorzata Hala
Keyword(s):  
Economic Growth ◽  
Economic System ◽  
Financial Institutions ◽  
Financial System ◽  
Financial Sector ◽  
Real Sector ◽  
The Real ◽  
State And Local ◽  
The Impact

The aim of the article is to present the role of the financial system in economic growth and development. The first part presents the traditional understanding of the relationship between the economic system and economic growth. The second part presents the experience of financial crises and their impact on the conversation on the mutual relations between the financial sector and the real sector. The third part shows the role of the state in the financial system. The article describes the arrangement of interrelated financial institutions, financial markets and elements of the financial system infrastructure.  It shows what part of the economic system the financial system is, and whether it enables the provision of services allowing the circulation of purchasing power throughout the economy. The article presents the important role of the financial system, the role related to the transfer of capital from entities with savings to entities that need capital for investments. It shows the financial system as a set of logically related organizational forms, legal acts, financial institutions and other elements enabling entities to establish financial relations in the real sector and the financial sector, and this system forms the basis of activity for entities using money, enabling the conclusion of various economic transactions, in which money performs various functions. The article also presents the concept of a financial crisis as a situation in which there are rapid changes in the financial market, usually associated with insufficient liquidity or insolvency of banks or financial institutions, and as a result, a decrease in production or its deepening. The article also includes issues related to the impact of public authorities (state and local authorities) on the financial system in the economy.

scholarly journals Impact of Transport Infrastructure on Gross Regional Products: Evidence from Chinese Provinces under the “Belt and Road Initiative”

2020 ◽  
Vol 2 (2) ◽  
pp. 23-45
Author(s):  
Jin-Hui Li ◽  
Chol-Ju An ◽  
Gwang-Nam Rim
Keyword(s):  
Economic Growth ◽  
Economic Benefits ◽  
Transport Infrastructure ◽  
Belt And Road Initiative ◽  
Regression Analyses ◽  
Belt And Road ◽  
Development Levels ◽  
The Impact ◽  
The Belt And Road

Purpose: This paper analyzes the impact of transport infrastructure on Gross Regional Products in Chinese provinces under the “Belt and Road Initiative”. Methods: The impact of the key elements of transport infrastructure on Gross Regional Products is analyzed based on the data related to development levels of transport infrastructure and economic development. Correlation and regression analyses were used for data analysis. Results: It is found that railways and highways, which are the key elements of transport infrastructure, have a strong correlation with Gross Regional Products, and their effects are diverse among provinces under study. Implications: The findings demonstrate the position and role of diverse infrastructural elements in enhancing the economic benefits of infrastructural investment and promoting economic growth. Thus, it is expected to facilitate decision-making related to infrastructural investment under the “Belt and Road Initiative”.

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