The Nexus between Financial Development and Economic Growth in Lao PDR

Kyophilavong, Phouphet; Uddin, Gazi Salah; Shahbaz, Muhammad

doi:10.1177/0972150915619809

Cited by 45 publications

(35 citation statements)

References 78 publications

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“…As such, this stage of development hypothesis as proposed by Patrick (1966) explains bidirectional causality between finance and growth which initiates the third finance-growth nexus view of "feedback hypothesis". This bidirectional view or feedback hypothesis is supported by existing studies such as: Calderon and Liu (2003), Ndako (2010), Ogbonna et al (2013), Hassan, Sanchez, and Yu (2011), Adeyeye et al (2015), Kyophilavong, Uddin, and Shahbaz (2016), and Abosedra and Sita (2018), among others.…”

Section: Causality Views On Finance-growth Nexussupporting

confidence: 71%

Investigating Finance-Growth Nexus: Further Evidence from Nigeria

Oyebowale¹,

Karley²

2018

IJEF

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This study investigates the influence of financial sector development on economic growth in Nigeria during the period 1982 to 2015. As such, the study obtained annual secondary data from the Central Bank of Nigeria statistical bulletins and World Bank financial database. The empirical model for this study examines growth in savings, growth in exchange rate, growth in government expenditure, growth in stock market capitalization, growth in credit to private sector, growth in gross capital formation, growth in trade openness and growth in broad money on economic growth in Nigeria. The multiple regression output reveals that growth in government expenditure and growth in gross capital formation are statistically significant on economic growth in Nigeria at 1% and 10% respectively under the period under investigation while other regressors in the model prove to be statistically insignificant. VAR test shows that there is considerable short-run causality running from lags of regressors to economic growth in Nigeria except for lag 1 of growth in exchange rate and lag 2 of growth in credit to private sector. The granger causality test reveals the existence of bi-directional causality between financial sector development and economic growth in Nigeria during the period under investigation. Hence, this study supports the ‘feedback hypothesis’ view on finance-growth. Based on these empirical results, this study recommends effective channeling of funds to the private sector and autonomy of the Central Bank of Nigeria in the use of monetary policy tools.

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Section: Causality Views On Finance-growth Nexussupporting

confidence: 71%

Investigating Finance-Growth Nexus: Further Evidence from Nigeria

Oyebowale¹,

Karley²

2018

IJEF

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“…Not surprisingly, over the last decade, the financial development and economic growth nexus has drawn immense attention among researchers and policymakers from both the developed and developing countries. A number of studies have been conducted to investigate different proxy variables of financial development and empirical studies have confirmed the positive association between them [see, for example, (Azam et al 2016;Bwire and Musiime 2015;Chang and Caudill 2005;Comin and Nanda 2014;De Gregorio and Guidotti 1995;Kassimatis 2000;Kyophilavong et al 2016;Ram 1999;Hasan and Barua 2015;Saad 2014;Shahbaz et al 2015)]. The contribution of financial development towards economic development comes with either bank-based financial development, market-based financial development, or both.…”

Section: Introductionmentioning

confidence: 99%

Financial Innovation, Stock Market Development, and Economic Growth: An Application of ARDL Model

Qamruzzaman

Jiang

2018

IJFS

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This study aims to explore the relationship between economic growth, financial innovation, and stock market development of Bangladesh for the period 1980–2016. To investigate long-run cointegration, this study used the autoregressive distributed lagged (ARDL) bounds testing approach. In addition, the Granger-causality test is used to identify directional causality between research variables under the error correction term. Study findings from the ARDL bound testing approach confirm the existence of a long-run association between financial innovation, stock market development, and economic growth. Furthermore, the findings from the Granger-causality test support bidirectional causality between financial innovation, economic growth and stock market development, and economic growth both in the long run and short run. These findings support the theory that market-based financial development and financial innovation in the financial system can spur economic development.

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“…The empirical studies of Ndlovu (2013), Tyavambiza and Nyangara (2015), and Michalopoulos et al (2011) support these findings; however, Bara and Mudxingiri (2016) found a positive association between them that was insignificant. The Economic Development theory explains that an efficient and well-functioning financial sector accelerates the capital accumulation process, which leads to economic development (Kyophilavong et al 2016). The development of the banking sector in Bangladesh has played a significant role in economic development through financial improvements.…”

Section: Domestic Credit From Private Sector (Dcb) As a Proxy For Finmentioning

confidence: 99%

“…The existing literature suggests that the development of the financial sector has a strong association with economic growth (Asghar and Hussain 2014;Bwirea and Musiime 2015;Comin and Nanda 2014;Duasa 2014;Hye and Islam 2013;Jedidia et al 2014;Khoutem et al, 2014;Kyophilavong et al 2016;Masuduzzaman 2014;Mhadhbi 2014;Ndlovu 2013;Rana and Barua 2015;Saad 2014aSaad , 2014bSunde 2013;Uddin et al, 2014a, b). This association exists because an efficient financial system allows for the effective mobilization of economic resources with higher productivity.…”

Section: Empirical Literature Reviewmentioning

confidence: 99%