The Dynamic Relationship of Domestic Credit and Stock Market Liquidity on the Economic Growth of the Philippines

Camba, Abraham C.; Camba, Aileen L.

doi:10.13106/jafeb.2020.vol7.no1.37

Cited by 13 publications

(9 citation statements)

References 23 publications

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“…The use of bank credit for productive financing will support economic growth and increase income. So, it can be said that economic growth is positively influenced by bank credit (Camba & Camba, 2020). the amount of credit extended.…”

Section: Economic Growth (Eg)mentioning

confidence: 99%

Internal Company Factors as Determining Variables for Improving Bank Lending

Prawitasari¹,

HOANG²,

Nguyen³

2020

JAFEB

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This study seeks to examine the main factors, external and internal to the bank, that enhance bank lending. Bank lending is one of the connecting bridges in sustaining society. Internal factors consist of ROA, DPK, and CAR. External factors are economic growth and interest rate of Bank Indonesia. The population of this research consists of traditional commercial banks listed on the IDX over the 2014-2017 period. Samples were chosen by purposive sampling method. This study uses secondary data with 56 samples; data analysis uses multiple linear regression. The findings of the study show that internal factors have a greater impact on increasing bank lending than external factors. The main variable among internal factors that influences increase in bank lending is ROA. DPK is the internal factor with the smallest impact on increasing bank lending. The implication of the study is that determining the bank lending should take more account of CAR, DPK, ROA, BI interest rates, and economic growth in making decisions about the amount of lending. These variables can only have a slight effect on increasing lending, though. Besides, internal factors such as NPL, LDR or non-economic factors also need to be considered in channeling bank credit.

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Section: Economic Growth (Eg)mentioning

confidence: 99%

Internal Company Factors as Determining Variables for Improving Bank Lending

Prawitasari¹,

HOANG²,

Nguyen³

2020

JAFEB

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“…Ngoc (2020) investigated the impact of inflation and money supply in Vietnam using NARDL approach for the period 1990-2017 and found a negative and asymmetric impact of inflation on growth in long run whereas money supply has a positive impact on growth in both the short and long run. In the Philippines, the effect of domestic credit and stock market liquidity on economic growth for the period 1995-2018 is investigated by Camba and Camba (2020). Their findings support the belief that economic growth is affected by the development of banking sector and stock market.…”

Section: Literature Reviewmentioning

confidence: 72%

Nexus between Indian Economic Growth and Financial Development: A Non-Linear ARDL Approach

Kumar¹,

Paramanik²

2020

JAFEB

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The study examines the nexus between financial development and economic growth in India during Q1: 1996 to Q3: 2018. This study employs time-series data of real GDP and ratio of broad money to GDP as a proxy for economic and financial development, respectively. The data are obtained from RBI database on the Indian economy. All variables are seasonally adjusted using X12-arima technique and expressed in natural logarithm form. Non-linear Autoregressive Distributed Lag (NARDL) bound test has been used to check for cointegrating relationship of these two variables. Empirical findings suggest that, unlike in the short run, in the long run financial development does impact economic growth positively. Further, a symmetric effect of positive and negative components of financial development is found for the Indian economy, whereas the effect of control variable like exchange rate and trade openness is in consonance with common economic intuition. Exchange rate is in consonance with intuitive economic logic that a fall in exchange rate makes exports cheaper and increases the quantity of export, which improves the balance of payment and leads to a rise in aggregate demand, hence improves economic growth. This paper contributes to the existing literature on India by breaking down financial indicator into positive and negative components to examine the finance-growth relationship.

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“…The study is divided into empirical study aboard and Nepal. Camba & Camba (2020) examines the dynamic relationship of domestic credit and stock market liquidity on the economic growth using the autoregressive distributed lag (ARDL) bounds testing approach to co-integration, together with Granger causality test based on vector error correction model (VECM). The study reveals that ARDL model indicated a long-run relationship of domestic credit and stock market liquidity on GDP growth.…”

Section: Theoretical Discussion and Empirical Evidencementioning

confidence: 99%

Causality between Financial Development and Economic Growth in Nepal

Maharjan

2020

NRB Econ. Rev.

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This study examines the empirical relationship between financial development and economic growth in Nepal. Financial development has been measured by three key pillars of the financial system bank, capital market and insurance. Gross domestic product and gross fixed capital formation are considered for economic growth indicators. Using time series techniques, the stationary properties of the data sets are tested followed by Johansen co-integration test to observe long run equilibrium relationship between the two variables and Granger Causality test to identify the causal relationship among the variables. Also, Vector Error Correction Model (VECM) has been employed to analyze the short run dynamics of the system. The result of the study reveals that there is cointegrating relationship between market capitalization and economic development with short-run causality is running from market capitalization to GDP. In regard to insurance market, error correction term is negative and significance for both GDP and GCF indicating there is cointegrating relationship between insurance market and economic development. However, the result shows no evidence of causality between insurance premium and economic development in short-run. The negative relation between bank and GDP reinforces that there is a cointegrating relationship between banking sector development and economic development. The result also shows that lagged value of GDP is significant. It shows that short-run causality is running from GDP to banking sector development.Nepal

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The Dynamic Relationship of Domestic Credit and Stock Market Liquidity on the Economic Growth of the Philippines

Cited by 13 publications

References 23 publications

Internal Company Factors as Determining Variables for Improving Bank Lending

Internal Company Factors as Determining Variables for Improving Bank Lending

Nexus between Indian Economic Growth and Financial Development: A Non-Linear ARDL Approach

Causality between Financial Development and Economic Growth in Nepal

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