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Financial development and economic growth in the Middle East

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  • Mouawiya Al-Awad
  • Nasri Harb

Abstract

This paper investigates the linkages between financial development and economic growth in the Middle East using newly developed methods of panel cointegration along with the popular time series methodologies such as the Johansen's cointegration, Granger causality, and the variance decompositions. The results indicate that, in the long run financial development and economic growth may be related to some level. In the short run, the panel causality tests point to real economic growth as the force that drives changes in financial development while individual countries' causality tests fail to give a clear evidence of the direction of causations.

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Bibliographic Info

Article provided by Taylor and Francis Journals in its journal Applied Financial Economics.

Volume (Year): 15 (2005)
Issue (Month): 15 ()
Pages: 1041-1051

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Handle: RePEc:taf:apfiec:v:15:y:2005:i:15:p:1041-1051

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References

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Citations

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Cited by:
  1. Abu-Bader, Suleiman & Abu-Qarn, Aamer, 2006. "Financial Developent and Economic Growth Nexus: Time Series Evidence from Middle Eastern and North African Countries," MPRA Paper 972, University Library of Munich, Germany.
  2. Kar, Muhsin & NazlIoglu, Saban & AgIr, Hüseyin, 2011. "Financial development and economic growth nexus in the MENA countries: Bootstrap panel granger causality analysis," Economic Modelling, Elsevier, vol. 28(1-2), pages 685-693, January.
  3. ince, meltem, 2011. "Financial liberalization, financial development and economic growth: An empirical analysis for Turkey," MPRA Paper 31978, University Library of Munich, Germany, revised 05 May 2011.
  4. Abdullahi D. Ahmed, 2010. "Financial liberalization, financial development and growth linkages in Sub-Saharan African countries: An empirical investigation," Studies in Economics and Finance, Emerald Group Publishing, vol. 27(4), pages 314-339, October.
  5. Monal Abdel-Baki, 2011. "The efficacy of the Egyptian bank reform plan in mitigating the impact of the global financial crisis," Economic Change and Restructuring, Springer, vol. 44(3), pages 221-241, August.
  6. Gurgul, Henryk & Łukasz, Lach, 2011. "Financial development and economic growth in Poland in transition: causality analysis," MPRA Paper 38034, University Library of Munich, Germany.
  7. Thomas Gries & Manfred Kraft & Daniel Meierrieks, 2011. "Financial deepening, trade openness and economic growth in Latin America and the Caribbean," Applied Economics, Taylor and Francis Journals, vol. 43(30), pages 4729-4739.
  8. Jochen Hartwig, 2008. "Has health capital formation cured ‘Baumol’s Disease’? – Panel Granger causality evidence for OECD countries," KOF Working papers 08-206, KOF Swiss Economic Institute, ETH Zurich.
  9. Taofik M. Ibrahim & Mohammed I. Shuaibu, 2013. "Financial Development: A Fillip or Impediment to Nigeria’s Economic Growth," International Journal of Economics and Financial Issues, Econjournals, vol. 3(2), pages 305-318.
  10. Ferda Halicioglu, 2007. "The Financial Development and Economic Growth Nexus for Turkey," EERI Research Paper Series EERI_RP_2007_06, Economics and Econometrics Research Institute (EERI), Brussels.
  11. Abdullahi D. Ahmed & Abu N.M. Wahid, 2011. "Financial structure and economic growth link in African countries: a panel cointegration analysis," Journal of Economic Studies, Emerald Group Publishing, vol. 38(3), pages 331-357, July.
  12. George E. Halkos & Marianna K. Trigoni, 2010. "Financial development and economic growth: evidence from the European Union," Managerial Finance, Emerald Group Publishing, vol. 36(11), pages 949-957, November.
  13. Hartwig, Jochen, 2010. "Is health capital formation good for long-term economic growth? - Panel Granger-causality evidence for OECD countries," Journal of Macroeconomics, Elsevier, vol. 32(1), pages 314-325, March.
  14. Hassan, M. Kabir & Sanchez, Benito & Yu, Jung-Suk, 2011. "Financial development and economic growth: New evidence from panel data," The Quarterly Review of Economics and Finance, Elsevier, vol. 51(1), pages 88-104, February.
  15. Nasri Harb, 2007. "Trade between Euro zone and Arab countries: a panel study," Applied Economics, Taylor and Francis Journals, vol. 39(16), pages 2099-2107.
  16. Halkos, George, 2010. "Financial and real sector interactions:the case of Greece," MPRA Paper 24391, University Library of Munich, Germany.
  17. Md abdul Wadud, 2009. "Financial development and economic growth: a cointegration and error-correction modeling approach for south Asian countries," Economics Bulletin, AccessEcon, vol. 29(3), pages 1670-1677.
  18. Natalia Utrero-Gonzalez, 2007. "Banking regulation, information asymmetries and industry growth: new evidence," Applied Financial Economics, Taylor and Francis Journals, vol. 17(1), pages 63-76.
  19. Marcelo P. Dabos & Ernesto R. Gantman, 2010. "The Fading Link? A New Empirical Analysis of the Relationship Between Financial Development and Economic Growth," Working Papers 2010-013, Becker Friedman Institute for Research In Economics.

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