Financial Development, International Trade, and Economic Growth in Australia: New Evidence From Multivariate Framework Analysis

Rahman, Mohammad Mafizur; Shahbaz, Muhammad; Farooq, Abdul

doi:10.1080/10599231.2015.997625

Cited by 30 publications

(21 citation statements)

References 44 publications

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“…The FMOLS and DOLS results indicate that trade openness, money supply, and gross capital formation are positively related to economic growth. Our findings support (Bal et al, 2016; Kar et al, 2011; Murthy et al, 2014; Odhiambo, 2009; Rahman et al, 2015; Sehgal et al, 2013; Sehrawat & Giri, 2016a; Uddin et al, 2016). Other interesting result derived from the study is that inward FDI negatively associated with economic growth in BRICS nations.…”

Section: Conclusion and Policy Implicationssupporting

confidence: 86%

“…The results confirmed that there is long-run relationship among inward FDI, trade openness, broad money, DC to private investors, gross capital formation, and GDP per capita in both the model. The long-run relationship between financial development, trade openness, and economic growth is supported by several researchers (Kakar & Khilji, 2011; Kar et al, 2011; Murthy et al, 2014; Odhiambo, 2009; Rahman et al, 2015; Sehgal et al, 2013; Sehrawat & Giri, 2016a; Uddin Bidisha, & Ozturk, 2016). In addition, the study used FMOLS and DOLS methods to investigate the degree of long-run coefficient.…”

Section: Results and Interpretationmentioning

confidence: 92%

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Panel Data Analysis of Financial Development, Trade Openness, and Economic Growth: Evidence from BRICS Countries

Rani¹,

Kumar

2018

Emerging Economy Studies

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The purpose of this article is to investigate the possible cointegration and direction of causality between foreign direct investment (FDI) inflow, trade openness, and economic growth in BRICS countries using panel data from 1993 to 2015. Besides these variables, money supply and domestic credit (DC) to private players are also added in the model to examine the impact of financial openness on economic growth. The Pedroni’s panel cointegration test is used to examine the existence of long-run relationship, and coefficients of cointegration are examined by fully modified ordinary least square (FMOLS) and dynamic ordinary least square (DOLS). Further panel Granger causality test is used to examine the direction of causality among the competing variables. The results of Pedroni’s panel cointegration test indicate that there exists a long-run relationship among the variables under considerations in BRICS countries. The coefficient of FMOLS and DOLS indicates that trade openness has a positive impact on economic growth in BRICS countries while FDI inflow has a negative impact in these nations. In addition, the results of panel Granger causality confirmed bidirectional causality between FDI inflow and economic growth in the short run. The study recommends that BRICS countries should liberalize trade openness as it strengthens the position of member countries in the world economy.

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Section: Conclusion and Policy Implicationssupporting

confidence: 86%

Section: Results and Interpretationmentioning

confidence: 92%

Panel Data Analysis of Financial Development, Trade Openness, and Economic Growth: Evidence from BRICS Countries

Rani¹,

Kumar

2018

Emerging Economy Studies

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“…In addition to the results, in all other sectors except MC and CH sectors, causality relation was observed at different rates from credit interest rates to industrial production index. There are also some studies in the literature in which the causality relation from bank credits to industrial production index is partially or completely observed (Toby and Peterside, 2014;Chisasa, 2014;Rahman et al, 2015;Stolbov, 2017;Qamruzzaman and Jianguo, 2017) However, there are also studies in which the causality relationship from bank loans to industrial production index cannot be found (Dal Colle, 2011;Marques et al, 2013;Tripathi and Kumar, 2015;Adeola and Ikpesu, 2016). The casual relationship between the industrial production index and the bank credit volume and credit interest rates give clues that production is financed by bank loans.…”

Section: Resultsmentioning

confidence: 99%

A Micro Based Study on Bank Credit and Economic Growth: Manufacturing Sub-Sectors Analysis

Hacıevliyagil

Ekşi̇

2019

South East European Journal of Economics and Business

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The manufacturing sector plays an important role in the development of modern economy all over the world. Manufacturing -as a sub -sector of the industry-refers to the production of raw materials and other factors of production, such as labor, land and capital, or goods and services through the production process. With the multiplier effect, the share of the manufacturing industry sectors in the world value added is around 20%. Similarly, the sector also covers about 1 in 9 of the total employment in the world (UNIDO, 2017). As to put it, the share of the sector in GDP is also very high and crucial. For example, in Turkey, the average manufacturing industry share in total GDP is 40% but it varies yearly. While the shares of agriculture and service sectors in GDP were declining in years recently, the share of the industrial sector was increasing (BAT, 2017).To fully realize the importance of the industry in evaluating the above figures, the interaction between the other sectors of the industrial sector and other economic activities on the economy scale has been examined for many years. In the 1920s, British economist Allyn Young suggested that network-type connections between sectors of this type were the Nuri Hacievliyagil, Ibrahim Halil Eksi AbstractThis study examines the relationship between bank credits and performance and growth of manufacturing sub-sectors. Industrial Production Index was used for a different approach as a dependent variable. Indications of the autoregressive distributed lag (ARDL) bound co-integration test support the theory that bank credits are more effective than loan rates on industrial production of sub-sectors. Moreover, the increase in bank credit leads to the rise of industrial production in all the sub-sectors, except Machinery. According to the Toda Yomamato causality test results, there are different degrees of causalities in means of the importance of bank loans for industrial production. On the other hand, in all sub-sectors except machinery and chemical sub-sectors, causality relations were observed at different grades beginning from loan interest rates to industrial production. As a result, this study concludes with the evidence of supply leading hypothesis via the financial sector leads and causes economic growth.

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“…Similarly, Polat et al (2014) document the complementary effect of trade liberalization on finance-growth nexus in South Africa. Rahman et al (2015) investigated the said phenomenon in Australia and found a complementary role of trade in growth-finance nexus.…”

Section: Literature Reviewmentioning

confidence: 99%

“…Since 1980s, most of the SAARC countries adopted trade liberalization policies to accelerate economic growth, which makes it interesting to investigate whether SAARC countries materialized the potential gain from this outward-oriented trade regime in terms of economic growth. Keeping in view this tendency of outward-oriented trade policies, most recently, some studies investigated trade openness for its effects on the finance-growth nexus and supported the claim (for instance, see Rahman et al, 2015;Asghar and Hussain, 2014;Polat et al, 2014).…”

Section: Introductionmentioning

confidence: 98%

Financial Sector Development, Trade Openness and Economic Growth Nexus: Evidence from SAARC Countries

Haq¹

2021

Forman J. Econ. Stud.

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To boost economic growth, SAARC countries resorted to trade liberalization policies since mid-1980s, therefore, now it is high time to evaluate the outcomes of this outward-oriented trade regime. Available literature confined the potential gain with the trading country’s status of the financial sector development. This study therefore empirically investigates the complementarity between domestic financial sector and trade openness for its growth effectiveness in the case of SAARC region. The empirical analysis basis upon the panel of six SAARC countries, using panel co-integration technique for the period 1980-2014. The empirical estimates of FMOLS and DOLS indicate that countries holding relatively developed domestic financial sectors enjoy larger gains from trade openness, which finally translates into economic progress. To be exact, the country’s domestic financial sector plays a complementary role between openness and growth in SAARC countries. Results hence suggest that SAARC countries need to lay higher emphasis on the development of the domestic financial sector.

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Financial Development, International Trade, and Economic Growth in Australia: New Evidence From Multivariate Framework Analysis

Cited by 30 publications

References 44 publications

Panel Data Analysis of Financial Development, Trade Openness, and Economic Growth: Evidence from BRICS Countries

Panel Data Analysis of Financial Development, Trade Openness, and Economic Growth: Evidence from BRICS Countries

A Micro Based Study on Bank Credit and Economic Growth: Manufacturing Sub-Sectors Analysis

Financial Sector Development, Trade Openness and Economic Growth Nexus: Evidence from SAARC Countries

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