Economic Growth and Financial Development: Evidence from Panel Cointegration Tests in Emerging Countries
DOI :
https://doi.org/10.5281/zenodo.8332442Résumé
This study analyzes the long-run relationship between economic growth (EG) and financial development (FD) in 27 emerging countries over the period 1980 to 2018 by employing the Johansen-Fisher panel cointegration method. The study also performs the vector error correction model (VECM) to determine the direction of a causal relationship among the variables. Two components of the index of financial development introduced by Svirydzenka (2016), financial markets and financial institutions indices, are employed to reveal through which channels EG has a long-term association with FD. Empirical findings show a significant long-run association between EG, the overall index of FD, and its sub-indices. Furthermore, the results from panel VECMs indicate a one-way unidirectional causality between EG and the FD index, while there is a two-way causality between EG and financial markets as well as between EG and financial institutions indices in the short run. We obtain similar results with Kao and Pedroni panel cointegration tests. We also show that financial institutions and financial markets significantly affect economic growth in the long run.
Téléchargements
Publiée
Comment citer
Numéro
Rubrique
Licence
(c) Tous droits réservés International Journal of Contemporary Economics and Administrative Sciences 2023
Ce travail est disponible sous la licence Creative Commons Attribution 4.0 International .
The Author(s) must make formal transfer of copyright for each article prior to publication in the International Journal of Contemporary Economics and Administrative Sciences. Such transfer enables the Journal to defend itself against plagiarism and other forms of copyright infringement. Your cooperation is appreciated. You agree that copyright of your article to be published in the International Journal of Contemporary Economics and Administrative Sciences is hereby transferred, throughout the World and for the full term and all extensions and renewals thereof, to International Journal of Contemporary Economics and Administrative Sciences.
The Author(s) reserve(s): (a) the trademark rights and patent rights, if any, and (b) the right to use all or part of the information contained in this article in future, non-commercial works of the Author's own, or, if the article is a "work-for-hire" and made within the scope of the Author's employment, the employer may use all or part of the information contained in this article for intra-company use, provided the usual acknowledgements are given regarding copyright notice and reference to the original publication.
The Author(s) warrant(s) that the article is Author's original work, and has not been published before. If excerpts from copyrighted works are included, the Author will obtain written permission from the copyright owners and shall credit the sources in the article. The author also warrants that the article contains no libelous or unlawful statements, and does not infringe on the rights of others. If the article was prepared jointly with other Author(s), the Author agrees to inform the co-Author(s) of the terms of the copyright transfer and to sign on their behalf; or in the case of a "work-for-hire" the employer or an authorized representative of the employer.
The journal is registered with the ISSN : 1925-4423.
IJCEAS is licensed under a Creative Commons Attribution 4.0 International License.
This license lets others distribute, remix, tweak, and build upon your work, even commercially, as long as they credit you for the original creation. This is the most accommodating of licenses offered. Recommended for maximum dissemination and use of licensed materials.
