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The Impact of the Development of the Banking Sector in Rentier Countries on Economic Growth in Light of Recurrent Crises

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  • Husam Abbas Ali
  • Hiba Youssef Taha

Abstract

Purpose: This study showed how the impact of the banking sector in rentier countries on economic growth for the period from 2004-2020, for each of Iraq, Qatar, Algeria, Libya, Kuwait. Design/Methodology/Approach: The method used is the Panel Data Regression Models methodology. Findings: The results show the weak development of the banking sector in general in the rentier countries, and the weakness of impact of the development of the lending interest rate and the number of bank branches on economic growth, while it found that domestic credit is directly related to economic growth, in addition to that the crises of international oil prices have negatively affected the development of the banking sector. From one period to another, the banking sector's connection with government activities has increased as a result of the weakness of the rest of the economic sectors. Practical Implications: The study showed the weak development of the banking sectors in the rentier countries, the field of research as a result of their increased dependence on oil and the lack of development of other sectors and consequently the weakness of the private sector, which led to the adhesion of the banking sector to government activities, and the banking sector was exposed to repeated crises arising from the fluctuation of international oil prices as well as the existence of the study. Originality/Value: The necessity of diversifying the structure of the economy of the rentier countries, the study sample, in a way that leads to the involvement of the banking sector in financing the private sector effectively, reducing interest rates and making them more flexible.

Suggested Citation

  • Husam Abbas Ali & Hiba Youssef Taha, 2023. "The Impact of the Development of the Banking Sector in Rentier Countries on Economic Growth in Light of Recurrent Crises," International Journal of Finance, Insurance and Risk Management, International Journal of Finance, Insurance and Risk Management, vol. 13(3), pages 113-130.
    • Handle: RePEc:ers:ijfirm:v:13:y:2023:i:3:p:113-130
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    More about this item

    Keywords

    Development of the banking sector; economic growth; rentier countries; COVID-2019.;
    All these keywords.

    JEL classification:

    • G2 - Financial Economics - - Financial Institutions and Services
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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