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Does Corruption Increase Financial Development? A Time Series Analysis in Pakistan

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  • Muhammad, Shahbaz
  • Qazi, Muhammad Adnan Hye
  • Muhammad, Shahbaz Shabbir

Abstract

The aim of present paper is to investigate the effect of corruption on financial development in Pakistan by using ARDL bounds testing approach to cointegration. The direction of causal relationship between the variables is examined by using VECM granger causality approach. Our empirical findings indicate that corruption promotes financial development. Causality analysis reveals that corruption and financial development are complementary.

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 29640.

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Date of creation: 02 Mar 2011
Date of revision: 10 Mar 2011
Handle: RePEc:pra:mprapa:29640

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Keywords: Financial Development; Corruption; Cointegration;

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  22. Mohammad Shahbaz, 2009. "A Reassessment of Finance-Growth Nexus for Pakistan: Under the Investigation of FMOLS and DOLS Techniques," The IUP Journal of Applied Economics, IUP Publications, vol. 0(1), pages 65-80, January.
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Cited by:
  1. Shahbaz, Muhammad, 2010. "Does financial instability increase environmental pollution in Pakistan?," MPRA Paper 31360, University Library of Munich, Germany, revised 28 Mar 2011.

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