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Financial Development And Economic Growth In Saudi Arabian Economy

This study investigates the relationship between financial development and economic growth for Saudi Arabia for the period 1989-2008 by using fully modified ordinary least squares (FMOLS) approach. Financial market development has been represented by the effect of credit market development (bank credits to the private sector) and stock market development (The general stock market index). The results indicate that the domestic bank credit to the private sector has significant and positive effect on economic growth in the long run, but insignificant and negative effect in the short run. On the other hand, stock market index has expected positive but insignificant effect in the long run but unexpected and insignificant effect in the short run. Finally, the growth of industrial production has expected positive and significant effect on economic growth either in the short or long run.

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Article provided by Euro-American Association of Economic Development in its journal Applied Econometrics and International Development.

Volume (Year): 13 (2013)
Issue (Month): 1 ()
Pages: 133-144

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Handle: RePEc:eaa:aeinde:v:13:y:2013:i:1_11
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  1. Guisan, M.C., 2009. "Government Effectiveness, Education, Economic Development And Well-Being: Analysis Of European Countries In Comparison With The United States And Canada, 2000-2007," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 9(1).
  2. Hicks, J. R., 1969. "A Theory of Economic History," OUP Catalogue, Oxford University Press, number 9780198811633, July.
  3. Aristeidis G. Samitas & Dimitris F. Kenourgios, 2007. "Impact of mergers and acquisitions on stock returns of tramp shipping firms," International Journal of Financial Services Management, Inderscience Enterprises Ltd, vol. 2(4), pages 327-343.
  4. Peter C. B. Phillips & Bruce E. Hansen, 1990. "Statistical Inference in Instrumental Variables Regression with I(1) Processes," Review of Economic Studies, Oxford University Press, vol. 57(1), pages 99-125.
  5. Kotaro Tsuru, 2000. "Finance and Growth: Some Theoretical Considerations and a Review of the Empirical Literature," OECD Economics Department Working Papers 228, OECD Publishing.
  6. Abdelhak Senhadji, 2000. "Sources of Economic Growth: An Extensive Growth Accounting Exercise," IMF Staff Papers, Palgrave Macmillan, vol. 47(1), pages 6.
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