Advanced Search
MyIDEAS: Login to save this paper or follow this series

Sensitivity Analysis of Domestic Credit to Private Sector in Pakistan: A Variable Replacement Approach Application with Con-integration

Contents:

Author Info

  • Mondher bellalah
  • SYED ALAMDAR ALI
  • Omar Masood

    ()
    (THEMA, Universite de Cergy-Pontoise
    Superior University, Lahore, Pakistan
    Royal Business School, University of East London)

Registered author(s):

    Abstract

    This study examines the short and long run relationship between Domestic Credit to Private Sector (DCPS) and its selected determinants namely, Domestic Credit to Public Sector, Gross Domestic Savings, Gross Domestic Product, Industrial Value Addition, Money Supply (M2), and the Total Volume of Trade in Pakistan over the period from 1980 to 2009. The relationship is determined using Johansen and Juselius’s framework and NLS and ARM based Error Correction Model to complete the long run and short run relationship analysis. We have conducted Variable replacement based sensitivity analysis of our model by examining two sets of exogenous variables and found that DCPS has no relationship with Economic Growth in Pakistan so far. The implications that we derive from this study is that in Pakistan the Development of Financial Sector is not making any contribution to the Economic Development. Further due to heavy Government Borrowings for non development Expenditures the lending actions of the Banks are becoming oligopolistic in nature, which is hindering the conventional flow of financing to private sector for economic development. Therefore, the monetary authority in Pakistan should adopt steeper target oriented policies for Financial Sector to extend credit for Economic Development.

    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.u-cergy.fr/thema/repec/2013-17.pdf
    Download Restriction: no

    Bibliographic Info

    Paper provided by THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise in its series THEMA Working Papers with number 2013-17.

    as in new window
    Length:
    Date of creation: 2013
    Date of revision:
    Handle: RePEc:ema:worpap:2013-17

    Contact details of provider:
    Postal: 33, boulevard du port - 95011 Cergy-Pontoise Cedex
    Phone: 33 1 34 25 60 63
    Fax: 33 1 34 25 62 33
    Email:
    Web page: http://thema.u-cergy.fr
    More information through EDIRC

    Related research

    Keywords: Sensitivity Analysis; credit; Economic Development; private sector;

    Find related papers by JEL classification:

    This paper has been announced in the following NEP Reports:

    References

    References listed on IDEAS
    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
    as in new window
    1. Chang-Tai Hsieh & Peter J. Klenow, 2007. "Misallocation and Manufacturing TFP in China and India," NBER Working Papers 13290, National Bureau of Economic Research, Inc.
    2. Levine, Ross & Loayza, Norman & Beck, Thorsten, 1999. "Financial intermediation and growth : Causality and causes," Policy Research Working Paper Series 2059, The World Bank.
    3. Rousseau, Peter L & Wachtel, Paul, 1998. "Financial Intermediation and Economic Performance: Historical Evidence from Five Industrialized Countries," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 30(4), pages 657-78, November.
    4. Fisman, Raymond & Love, Inessa, 2004. "Financial development and growth in the short and long run," Policy Research Working Paper Series 3319, The World Bank.
    5. Beck, Thorsten & Levine, Ross & Loayza, Norman, 2000. "Finance and the sources of growth," Journal of Financial Economics, Elsevier, vol. 58(1-2), pages 261-300.
    6. Koivu, Tuuli, 2002. "Do efficient banking sectors accelerate economic growth in transition countries," BOFIT Discussion Papers 14/2002, Bank of Finland, Institute for Economies in Transition.
    7. Philipp Hartmann & Florian Heider & Elias Papaioannou & Marco Lo Duca, 2007. "The role of financial markets and innovation in productivity and growth in Europe," Occasional Paper Series 72, European Central Bank.
    8. Geneviève Verdier & Erasmus Kersting & Era Dabla-Norris, 2010. "Firm Productivity, innovation and Financial Development," IMF Working Papers 10/49, International Monetary Fund.
    9. Klaus Neusser & Maurice Kugler, 1998. "Manufacturing Growth And Financial Development: Evidence From Oecd Countries," The Review of Economics and Statistics, MIT Press, vol. 80(4), pages 638-646, November.
    10. Baltensperger, Ernst, 1976. "The Borrower-Lender Relationship, Competitive Equilibrium, and the Theory of Hedonic Prices," American Economic Review, American Economic Association, vol. 66(3), pages 401-05, June.
    11. Tuuli Koivu, 2002. "Do efficient banking sectors accelerate economic growth in transition countries?," Macroeconomics 0212013, EconWPA.
    Full references (including those not matched with items on IDEAS)

    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:ema:worpap:2013-17. 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: (Marion Oury).

    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.