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Financial Development, Commercial Development, and Economic Growth in the Selected Emerging and the Middle Eastern Countries#

Author

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  • Lotfali Agheli

    (Faculty Member, Economic Research Institute, Tarbiat Modares University, Iran,)

  • Golnaz Hadian

    (MA in Economics, Tarbiat Modares University, Iran.)

Abstract

This study investigates panel causality relationships among financial development (FD), commercial development and economic growth using bootstrap method in selected emerging and developing countries during 1980-2013. In this study, simultaneous equations, seemingly unrelated regression, Wald test and bootstrap critical tests are used to determine causality relationship among variables under study. Our findings indicate the difference of causality across countries and among different variables, so that in some countries, FD has led to economic growth and in other countries, this has not happened because of lack of deep financial sector. However, in most countries, commercial development has led to improvement of economic growth. Moreover, the results imply difference in direction of causality from economic growth to both financial and commercial development.

Suggested Citation

  • Lotfali Agheli & Golnaz Hadian, 2017. "Financial Development, Commercial Development, and Economic Growth in the Selected Emerging and the Middle Eastern Countries#," International Journal of Economics and Financial Issues, Econjournals, vol. 7(3), pages 362-370.
    • Handle: RePEc:eco:journ1:2017-03-47
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    References listed on IDEAS

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    Cited by:

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    2. Mesut Alper GEZER, 2018. "The relationship between financial deepening and economic growth: Bootstrap causality approach for the selected upper middle income countries," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania / Editura Economica, vol. 0(1(614), S), pages 95-112, Spring.

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    More about this item

    Keywords

    Oil-dependent Countries; Emerging Markets; Panel Causality;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • P45 - Political Economy and Comparative Economic Systems - - Other Economic Systems - - - International Linkages

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