This study empirically explores the causal relationship between financial depth and economic growth in Kazakhstan. The specific objective of this study is to investigate whether the causality direction between financial depth and economic growth in Kazakhstan does in fact apply. With this aim, the data from 20 banks operating between 2006 and 2015 was used. This data was obtained from the National Bank of Kazakhstan Statistical Bulletin. Quarterly observations are collected in aggregate form during 1Q 2006 – 4Q 2015 for GDP in level and stock market index value, and individual observations from the 20 largest banks during 1Q 2006 – 4Q 2015 for total lending volume in level in percent point, and total deposit volume in level. These quarterly data are employed in the panel study framework. The results of the study show that banks’ lending significantly strongly affects economic growth in Kazakhstan. At the same time, GDP also significantly strongly affects banks’ lending. Therefore, there is mutual causality between banks’ lending and the economy (Gross Domestic Product) in Kazakhstan. Both the economy and the financial sector do affect each other positively and significantly.
scite is a Brooklyn-based organization that helps researchers better discover and understand research articles through Smart Citations–citations that display the context of the citation and describe whether the article provides supporting or contrasting evidence. scite is used by students and researchers from around the world and is funded in part by the National Science Foundation and the National Institute on Drug Abuse of the National Institutes of Health.