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The role of institutional quality in finance-growth nexus: evidence from GCC countries

Author

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  • Al-Senani, Khalid
  • Esharif, Adnan Ahmed
  • Bouayn, Fathi Saed
  • Abida, Zouheir

Abstract

This study aims to determine the relationship between financial development and economic growth with respect to the state of institutional quality on 3 Gulf Cooperation Council (GCC) countries, namely, Oman, Qatar and United Arab Emirates from 2008 to 2022. Using the dynamic generalized method of moments in a panel data analysis, we found that financial development has a positive effect on economic growth. Equally important, the institutional quality plays a significant and positive role in economic growth. More interestingly, the study finds that the institutional development is complementary to financial development. As a policy implication, we recommend that policymakers place special importance on implementing policies that result in the deepening of financial systems, including a sound institutional framework. Thus, by promoting the development of a country’s financial system, economic growth will be accelerated.

Suggested Citation

  • Al-Senani, Khalid & Esharif, Adnan Ahmed & Bouayn, Fathi Saed & Abida, Zouheir, . "The role of institutional quality in finance-growth nexus: evidence from GCC countries," International Journal of Social Science, Management and Economics Research - IJSSMER, International Journal of Social Science, Management and Economics Research - IJSSMER, vol. 3(1).
    • Handle: RePEc:ags:ijssme:355460
    DOI: 10.22004/ag.econ.355460
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