This study investigates the causal relationship between banking sector development, inflation, and economic growth for six Asian countries (Bangladesh, China, India, Malaysia, Pakistan and Sri Lanka) over the period of 1970-2016. Using a Pedroni panel, Kao co-integration test, Panel Granger causality-based Error Correction Model, Dynamic ordinary least square (DOLS), and Fully modified ordinary least square (FMOLS), this study finds that the development of the banking sector generally has a positive relationship with economic growth in the long-run. This results show that in the long-run, monetary policy play a vital role in the economic growth. This study also confirmed the response causality between the indicators of banking sector development and economic growth. Based on the empirical findings, this research provides important policy implications to the banking sector and economic supervisory bodies in order to achieve the long run economic growth.
The textile sector in Pakistan is the largest manufacturing industry and recognizable model of resistance economy. Over centuries, textile sector has been the country’s backbone making available sources of occupation and export returns. Generally, financial leverage is the organizational capability of using borrowed money. It can be described as a fraction, to which a company uses fixed income securities such as debt and equity. The objective of the current study is measuring the impact of financial leverage on firm’s financial condition. It is essential to know whether a positive or negative relationship exists between two terms, financial leverage and financial performance of the textile industry; evidence from the listed firms of Pakistani textile industry from 2007-2016. Pooled regression analysis technique shows that there is positive relationship between financial leverage and financial performance (Returns on Assets, Sales Growth and Net Profit Margin). On the other hand, negative relationship exists between Return on Equity ratio. It is confirmed that the organizations have more profitability, might enhance the financial performance having more levels of financial leverage. This study also gives evidence by estimating different facts. It exposes that the main elements of the textile industry in Pakistan enhance their financial performance by employing the financial leverage strategy and can attain a sustainable future growth by making decisions about the selection of their optimum capital structure.
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