Advanced Search
MyIDEAS: Login

The Analysis Of The Relationship Between Financial Development And Economic Growth With Bound Testing Approach In Turkey: 1987-2007

Contents:

Author Info

  • Halil Altintas
  • Yücel Ayricay

    ()
    (K.Maras Sutcu Imam University)

Registered author(s):

    Abstract

    This paper has empirically examined the relationship between financial development and economic growth in Turkey by using quarterly observation over the period 1987–2007. The model is estimated with the bound testing approach to cointegration with the autoregressive distributed lag (ARDL) framework advanced by Pesaran et al (2001). The results suggest that there is a long-run relationship between real growth, financial development, trade openness and real interest rate. The coefficient of financial development indicates that a 1 percent increase in financial depth increases economic growth by 0.67 percent. While the coefficient of real deposit rate also suggests that a 1 percent rise in real interest rate will increases real output by 0.12 percent in the long run. Although, the coefficient of trade openness is statistically remained insignificant. Since the effects of financial development policy are higher than that of real interest rate which supports the argument that in a developing country like Turkey the availability of funds rather the cost of funds is more important to raise real income. Moreover, this result supports the Mckinnon and Shaw hypothesis that an increase in real interest rate facilitates financial savings and real income.

    Download Info

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
    File URL: http://www.anadolu.edu.tr/arastirma/hakemli_dergiler/sosyal_bilimler/pdf/2010-2/2010_02_06.pdf
    Download Restriction: no

    Bibliographic Info

    Article provided by Anadolu University in its journal Anadolu University Journal of Social Sciences.

    Volume (Year): 10 (2010)
    Issue (Month): 2 (May)
    Pages: 71-98

    as in new window
    Handle: RePEc:and:journl:v:10:y:2010:i:2:p:71-98

    Contact details of provider:
    Postal: Yunus Emre Kampusu 26470, Eskişehir
    Phone: (90) (222) 335-0580 x 2743
    Fax: (90) (222) 320-1304
    Email:
    Web page: http://www.anadolu.edu.tr/akademik/birim/genelBilgi/205/3429/1
    More information through EDIRC

    Related research

    Keywords: Financial Development; Economic Growth; Bound Testing; Turkey;

    Find related papers by JEL classification:

    References

    No references listed on IDEAS
    You can help add them by filling out this form.

    Citations

    Lists

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    Statistics

    Access and download statistics

    Corrections

    When requesting a correction, please mention this item's handle: RePEc:and:journl:v:10:y:2010:i:2:p:71-98. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Social Sciences Institute).

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.