The Dynamic of Financial Development, Imports, Foreign Direct Investment and Economic Growth: Cointegration and Causality Analysis in Pakistan

Shahbaz, Muhammad; Rahman, Mohammad Mafizur

doi:10.1177/097215091201300202

Cited by 116 publications

(92 citation statements)

References 66 publications

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“…J-curve (Shahbaz et al [16]); devaluation and economic growth (Shahbaz et al [17]); financial development, foreign direct investment and economic growth (Shahbaz and Rahman, [18]); trade openness and economic growth (Shahbaz,[19]) 1 and, money supply and interest rate (Khattak et al. [21]).…”

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confidence: 99%

Analyzing time–frequency relationship between oil price and exchange rate in Pakistan through wavelets

Shahbaz

Tiwari

Tahir

2014

Journal of Applied Statistics

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Abstract:This study analyzes the time-frequency relationship between oil price and exchange rate for Pakistan by using measures of continuous wavelet such as wavelet power, cross-wavelet power, and cross-wavelet coherency. The results of cross-wavelet analysis indicate that covariance between oil price and exchange rate are unable to give clear-cut results but both variables have been in phase and out phase (i.e. they are anti-cyclical and cyclical in nature) in some or other durations. However, results of squared wavelet coherence disclose that both variables are out of phase and real exchange rate was leading during the entire period studied, corresponding to the 10~15 months scale. These results are the unique contribution of the present study, which would have not been drawn if one would have utilized any other time series or frequency domain based approach. This finding provides evidence of anti-cyclical relationship between oil price and real effective exchange rate. However; in most of the period studied, real exchange rate was leading and passing anti-cycle effects on oil price shocks which is the major contribution of the study.

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confidence: 99%

Analyzing time–frequency relationship between oil price and exchange rate in Pakistan through wavelets

Shahbaz

Tiwari

Tahir

2014

Journal of Applied Statistics

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“…The theory established a strong causality from trade openness to economic growth based on the fact that trade openness influences the decision of various economies to integrate their home economies with the rest of the world, which will in turn boost both export and import thereby increasing specialization and productivity (Shahbaz, 2009(Shahbaz, , 2012Shahbaz & Rahman, 2012). Anoruo and Yusuf (2000) documented a bi-directional causality between economic growth and trade openness while Jung and Marshall (1985) observed a unidirectional relationship between economic growth and trade.…”

Section: Trade Openness and Economic Growth Nexusmentioning

confidence: 99%

Economic growth, financial development and trade openness in Nigeria: An application of the ARDL bound testing approach

Lawal

Nwanji

Asaleye

et al. 2016

Cogent Economics & Finance

101

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For over a decade now, various efforts have been put in place by various governments of the developing economies to promote economic growth, financial development and expand trade with mixed results. The ability of financial development and/or trade openness to influence economic growth in the developing economies has been a subject of hot debate and remains inconclusive. While a number of scholars are of the view that compelling cointegration exists among each of these constructs, another set of substantial authors have documented that economic growth, trade openness and financial development do evolve independent of each other. Drawing from four financial developments-growth nexus theories, this study used the ARDL bound estimation techniques to examine the existence of cointegration among economic growth, financial development and trade openness in Nigeria. We intend to know what policy instruments need to be manipulated so as to achieve economic growth and financial stability. Our results show that a two-way cointegration exists between economic growth and financial development, on the one hand, as well as between economic growth and trade openness, on the other hand. We therefore recommend that in order to achieve economic growth, policymakers should pursue strong financial development and increase trade openness.

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“…Similarly Shahbaz and Rahman, (2012) argue that the impact of FDI on output growth can be improved through development of financial markets. In contrast, referring Shan et al (2001); Shan and Morris, (2002); Gries et al (2008) argue that a strong 8 connection between financial development and growth cannot be identified in mature OECD countries.…”

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confidence: 99%

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

Rahman

Shahbaz

Farooq

2015

Journal of Asia-Pacific Business

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This study investigates the relationship between financial development, international trade and economic growth in case of Australia over the period of 1965-2010. The ARDL bounds testing approach to cointegration was applied to examine the long run relationship among the series, while stationarity properties of the variables were tested by applying two structural break tests i.e. Zivot-Andrews (1992) and Clemente et al. (1998).Our empirical evidence confirmed the long run relationship among the variables. The results showed that financial development, international trade and capital are the drivers of economic growth both in short run as well as in long run. The feedback effect exists between international trade and economic growth. Financial development Granger causes economic growth validating supply-side hypothesis in case of Australia.

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The Dynamic of Financial Development, Imports, Foreign Direct Investment and Economic Growth: Cointegration and Causality Analysis in Pakistan

Cited by 116 publications

References 66 publications

Analyzing time–frequency relationship between oil price and exchange rate in Pakistan through wavelets

Analyzing time–frequency relationship between oil price and exchange rate in Pakistan through wavelets

Economic growth, financial development and trade openness in Nigeria: An application of the ARDL bound testing approach

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

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