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Impact of financial development on economic growth: empirical evidence from Pakistan

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  • Abdul Jalil
  • Mete Feridun

Abstract

The present article aims at investigating the effects of financial sector development on economic growth in the case of Pakistan from 1975 to 2008. A composite financial depth indicator is built using principal component analysis (PCA) and is used in the Autoregressive Distributed Lag (ARDL) bounds testing approach to cointegration. The results suggest the presence of a positive and significant relationship between financial development and economic growth.

Suggested Citation

  • Abdul Jalil & Mete Feridun, 2011. "Impact of financial development on economic growth: empirical evidence from Pakistan," Journal of the Asia Pacific Economy, Taylor & Francis Journals, vol. 16(1), pages 71-80.
    • Handle: RePEc:taf:rjapxx:v:16:y:2011:i:1:p:71-80
    DOI: 10.1080/13547860.2011.539403
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    References listed on IDEAS

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    1. Gelb, Alan H., 1989. "Financial policies, growth, and efficiency," Policy Research Working Paper Series 202, The World Bank.
    2. Muhammad Arshad Khan & Abdul Qayyum, 2007. "Trade Liberalisation, Financial Development and Economic Growth," Trade Working Papers 22204, East Asian Bureau of Economic Research.
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    4. James Laurenceson & Joseph C.H. Chai, 2003. "Financial Reform and Economic Development in China," Books, Edward Elgar Publishing, number 2714.
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