scholarly journals The relationship between banks' credit activity and economic growth: An empirical research for the Republic of Serbia

Industrija ◽  
2020 ◽  
Vol 48 (2) ◽  
pp. 37-53
Author(s):  
Milka Grbić ◽  
Stevan Luković
Keyword(s):  
Economic Growth ◽  
Banking Sector ◽  
Research Study ◽  
Causality Test ◽  
Real Gdp ◽  
Gdp Growth Rate ◽  
Interactive Relationship ◽  
The Republic ◽  
The Relationship ◽  
Different Order

The subject matter of the research study conducted in this paper is the interactive relationship between banks' credit activity and economic growth. In connection with that, the paper is aimed at examining the existence and direction of the cause and effect relationship between the credit activity of the banking sector and the overall economic activity in the Republic of Serbia. The quarterly data related to the period from 2003 to 2019 were collected for the purposes of the research. The share of the loans granted to enterprises in the GDP and the share of the loans granted to households in the GDP are used as the indicators of the credit activity in the study, whereas the real GDP growth rate is determined as the indicator of economic growth. Given the fact that the observed time series are of the different order of integration, the analysis is conducted within the VAR model by applying the Toda-Yamamoto procedure of the Granger causality test. The results of the research show a significant unidirectional causal relationship according to Granger, which starts from the direction of banks' credit activity towards economic growth. The results of the conducted research study can be useful to the makers of the economic policy and the creators of a strategy for the development of the national economy.

scholarly journals Cointegration and causality analysis between foreign direct investment, exports and economic growth in the republic of Croatia

2021 ◽  
Vol 26 (2) ◽  
pp. 145-158
Author(s):  
Martina Sopta ◽  
Vlatka Bilas ◽  
Sanja Franc
Keyword(s):  
Economic Growth ◽  
Growth Rate ◽  
Granger Causality Test ◽  
Corporate Management ◽  
Causality Test ◽  
Goods And Services ◽  
Real Gdp ◽  
Gdp Growth Rate ◽  
Cointegration Tests ◽  
The Republic

The main objective of this paper is to analyze the causal relationship between foreign direct investment (FDI), exports, and economic growth in the Republic of Croatia for the period 2000-2020 and determine the implications of research results on corporate management. The management of the investment enterprise is usually interested in high returns, whereas the management of the recipient enterprise is interested in higher productivity, spillovers, and larger market share on domestic and international markets. Several methodological approaches, including unit root tests, cointegration tests, and Granger causality test, were used to assess the relationship between gross domestic product (GDP) growth rate, on the one side, and the share of FDI and total exports of goods and services in real GDP, on the other side. The results of cointegration tests indicated there is no long-term relationship between the real GDP growth rate, the share of FDI, and the share of exports of goods and services in real GDP. Based on the Granger causality test, it cannot be concluded that there is no causal relationship between the analysed variables. Finally, the paper discusses the implications of the conducted research for corporate management. The results indicate that managers are not discouraged by the fact that FDI is not correlated to economic growth, as investment decisions are determined by numerous factors and not primarily by the growth rate of a recipient country.

The Relationship Between Economic Growth and Banking Sector Development in Ukraine

2022 ◽  
Vol 19 ◽  
pp. 222-230
Author(s):  
Svitlana Kachula ◽  
Maksym Zhytar ◽  
Larysa Sidelnykova ◽  
Oksana Perchuk ◽  
Olena Novosolova
Keyword(s):  
Economic Growth ◽  
Banking Sector ◽  
Positive Impact ◽  
Limiting Factors ◽  
Causality Test ◽  
Bank Deposits ◽  
Real Gdp ◽  
Banking Sector Development ◽  
Spatial Dimensions ◽  
The Relationship

The paper examines the relationship between economic growth and banking sector indicators in Ukraine. The constructed empirical model revealed a positive impact of bank deposits on real GDP growth. The causal relationships between economic growth in Ukraine and the performance of the banking sector are analyzed using the Granger Causality Test. It is established that banking deposits Granger-cause GDP, while banking credits do not, but GDP has an effect on banking credits. It is noted that the banking sector of Ukraine does not play a significant role in the redistribution of capital in the intersectoral and spatial dimensions. It is defined limiting factors of lending to the private sector and ways to increase the deposit base of banks.

scholarly journals Role of Exports in Economic Growth: Evidence from India

2020 ◽  
Vol 65 (4) ◽  
Author(s):  
Tamma Koti Reddy
Keyword(s):  
Economic Growth ◽  
Causal Relation ◽  
International Markets ◽  
Export Growth ◽  
Gdp Growth ◽  
Causality Test ◽  
Real Gdp ◽  
Gdp Growth Rate ◽  
New Strategy ◽  
Auto Regressive

The study attempts to examine the causal relation among export growth, inflation, foreign direct investment and real GDP growth rate for the period 1990-91 to 2018-19 using Vector Auto Regressive (VAR) model and Granger Causality test. Both the statistical techniques employed show similar results pertaining to the causal relationship among the variables selected for the study. The results show that FDI & Real GDP growth have positive effect on export growth and there is no evidence of inflation alone causing export growth, but inflation along with FDI and Real GDP cause the Export growth. There is also evidence that export growth, inflation, real GDP growth together cause FDI. The results also indicate that none of the aforementioned economic variables either individually or jointly cause real GDP growth. The authors opine that slow growth in exports had been compensated by domestic demand and services-led growth in the process of economic growth during the period of study. The study stressed the need for introducing structural reforms to enhance the competitiveness of Indian products in the international markets. The focus should be on designing a new strategy for technology-driven export-oriented sectors as the export stability is positively associated with economic growth.

scholarly journals The Influence of the Banking Sector Functions on Economic Activity in Macedonia

2015 ◽  
Vol 62 (2) ◽  
pp. 208-221
Author(s):  
Elena Naumovska ◽  
Kiril Jovanovski ◽  
Gorgji Gockov
Keyword(s):  
Economic Growth ◽  
Banking Sector ◽  
Relative Importance ◽  
Basic Functions ◽  
Basic Purpose ◽  
The Subject ◽  
Sector Performance ◽  
The Republic ◽  
The Impact ◽  
The Relationship

Abstract The subject of this paper is the way in which the banking sector in Macedonia contributes to the economic growth by performing five basic functions: savings mobilization, risk diversification, resource allocation, corporate control and easing exchange. The basic purpose of this paper is, through assessment of the relative importance of each of the functions of the banking sector and analysis of the relationship existing between the banking sector intermediation and economic growth (as measured by GDP) to investigate the impact of the banking sector on the real sector performance in the Macedonia. According to the obtained results the paper provides conclusions for opportunities and directions for increasing the efficiency of the banking sector in the Republic of Macedonia.

scholarly journals The Relationship between Innovation, Financial Development, and Economic Growth : Testing in ASEAN Countries for the Period 1986-2015

2019 ◽  
Vol 2 (1) ◽  
pp. 23-48
Author(s):  
Diah Saputri ◽  
Harmadi Harmadi
Keyword(s):  
Economic Growth ◽  
Financial Development ◽  
Banking Sector ◽  
Secondary Data ◽  
Principal Component ◽  
Causality Test ◽  
Asean Member ◽  
The World ◽  
The Difference ◽  
The Relationship

This study aims to determine the relationship between innovation, financial development, and economic growth. Innovation is measured by patents, and economic growth is measured by the percentage of GDP per capita, while financial development is measured by seven indicators, namely banking sector development. Index formation is done through the Principal Component Analysis (PCA), with the note of the variable were defined earlier. This study uses data from ten ASEAN member countries with observation periods from 1986-2015. Research data is secondary data derived from the World Development Indicator and Global Financial Development at the World Bank. The analytical method used in this study is granger causality test, VECM, and IRF and FEVD analysis. The results showed that there were several differences in results in the direction of the three relationships. This difference is due to the difference in proxy that used in the study. There are three cases in this study. Broadly speaking, the relationship between financial development and economic growth is a unidirectional causality from financial development to economic growth. On the other hand, testing on economic growth with innovation shows a bidirectional causality. On the relationship between financial development and innovation, there are unidirectional causality from innovation to financial development. Nevertheless, the relationship between the three variables shows a long-term relationship.

scholarly journals What is the relationship between FDI and economic growth? Evidence from EU15 countries

2020 ◽  
Vol 8 (1) ◽  
pp. 253-281
Author(s):  
Vlatka Bilas
Keyword(s):  
Economic Growth ◽  
Growth Rate ◽  
Panel Cointegration ◽  
Gdp Growth ◽  
Causality Test ◽  
Ardl Model ◽  
Long Run ◽  
Gdp Growth Rate ◽  
The Impact ◽  
The Relationship

The aim of the paper is to examine the relationship between foreign direct investment (FDI) and economic growth in EU15 countries over the period 2002-2018. EU15 makes a group of countries which entered the EU prior to the biggest enlargement in 2004, namely latest in 1995 (Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Netherlands, Portugal, Spain, Sweden and United Kingdom). Paper findings contribute to the existing literature on the impact of FDI on economic growth. It employs different unit root tests, panel cointegration test (ARDL model) and Granger causality. Estimated panel ARDL model found some evidence that there are long-run equilibrium between LogGDP, LogFDI and LogFDIP series. The rate of adjustment back to equilibrium is between 4.43% and 5.95%. The long-run coefficients are all positive, but not all of them are statistically significant. In case of LogFDIP series long-run coefficients are statistically significant, varying between 0.1226 and 0.4398. These coefficients indicate that 1% increase in LogFDIP (logarithm of FDI to GDP) increases LogGDP between 0.1226% and 0.4398%. Results of Dumitrescu-Hurlin panel causality test indicated that there is only unidirectional causal relationship from GDP growth rate to FDI growth rate, and from GDP growth rate to LogFDIP. Conclusively, there is only a weak evidence that FDI had statistically significant impact on the GDP in EU15 countries.

scholarly journals The nexus between unemployment and economic growth in Serbia: Does Okun's law hold?

2020 ◽  
Vol 68 (7-8) ◽  
pp. 484-499
Author(s):  
Vladimir Mihajlović
Keyword(s):  
Economic Growth ◽  
Unemployment Rate ◽  
Employment Policy ◽  
Okun’S Law ◽  
Okun's Law ◽  
Real Gdp ◽  
The Republic ◽  
The Relationship ◽  
Nonlinear Autoregressive ◽  
Production Approach

Starting from the empirically-based postulate that economic growth, through increasing labour demand and employment, reduces the unemployment rate, this study investigates the relationship between real GDP growth and the unemployment rate in the Republic of Serbia. The analysis is motivated by the fact that the unemployment rate in Serbia has significantly decreased over the last decade (especially after 2014), despite relatively modest rates of economic growth. These tendencies indicate the possibility of a nonlinear (asymmetric) relationship between the two variables, which has important implications for designing a more efficient economic and employment policy. Applying both linear and nonlinear Autoregressive Distributed Lags models (ARDL and NARDL) to quarterly data in the 2008-2019 period reveals that the relationship between economic growth and unemployment rate is negative, as suggested by Okun's law, but also that there is a profound asymmetry in this relationship. Namely, a 1% increase in the real output leads to a 4.74% decrease in the unemployment rate, whereas a decrease in output by the same percentage increases the unemployment rate by only 1.52%. Further analysis, based on investigating the relationship between GDP decomposed by the expenditure and production approach, and the unemployment rate, indicates that Okun's law asymmetry in the economy of Serbia is most affected by domestic demand, primarily private and government expenditures on the products of labour-intensive activities, such as services, agriculture, and industry.

Electricity consumption and economic growth in ASEAN

2017 ◽  
Vol 5 (2) ◽  
pp. 16
Author(s):  
Ahmad Ghazali Ismail ◽  
Arlinah Abd Rashid ◽  
Azlina Hanif
Keyword(s):  
Economic Growth ◽  
Energy Use ◽  
Electricity Consumption ◽  
Panel Estimation ◽  
Real Gdp ◽  
Long Run ◽  
Bidirectional Relationship ◽  
Short Run ◽  
Using Data ◽  
The Relationship

The relationship and causality direction between electricity consumption and economic growth is an important issue in the fields of energy economics and policies towards energy use. Extensive literatures has discussed the issue, but the array of findings provides anything but consensus on either the existence of relations or direction of causality between the variables. This study extends research in this area by studying the long-run and causal relations between economic growth, electricity consumption, labour and capital based on the neo-classical one sector aggregate production technology mode using data of electricity consumption and real GDP for ASEAN from the year 1983 to 2012. The analysis is conducted using advanced panel estimation approaches and found no causality in the short run while in the long-run, the results indicate that there are bidirectional relationship among variables. This study provides supplementary evidences of relationship between electricity consumption and economic growth in ASEAN.

scholarly journals BANK PROFITABILITY AND MACROECONOMY: EVIDENCE FROM LITHUANIA

2017 ◽  
Vol 24 (2) ◽  
pp. 383-405 ◽  
Author(s):  
Laurynas NARUŠEVIČIUS
Keyword(s):  
Banking Sector ◽  
Short Term ◽  
Empirical Examination ◽  
Bank Profitability ◽  
Pooled Mean Group ◽  
Real Gdp ◽  
Income Statement ◽  
Main Determinants ◽  
The Relationship

The purpose of this paper is to investigate the relationship between profitability of the Lithuanian banking sector and its internal and external determinants. We use the panel error correc­tion model to assess long-term and short-term determinants of items from bank income statements (net interest income, net fee and commission income and operating expenses). The results of the pooled mean group estimator show that bank size and real GDP are the main determinants in the long-term. Meanwhile, empirical examination suggests various variables as short-term determinants of income statement items. The pooled mean group estimation technique and the analysis of sepa­rate income statement items enable us to have a better insight into the Lithuanian banking sector and determinants of its revenue and expenses.

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