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Impact of Bank Credits on Economic Growth in Selected Developing Countries by Using GMM Method (in Persian)

Author

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  • Bahrami, Jaber

    (Iran)

  • Pahlavani, Mosayeb

    (Iran)

  • Jansouz, Parinaz

    (Iran)

Abstract

Development of financial markets in economic growth is always a key issue in developing economies. In this regard, one of the important factors affecting economic growth, is bank credits through creation of investment opportunities for producers, provides growth and development background. Therefore, the goal of the present study is to survey the effect of bank credits to various sectors of the economy, with other macro predictors on economic growth in 74 selected developing countries during the period 1990-2009. Accordingly, a growth model was specified and estimated by using Generalized Method of Moments (GMM). The results indicate that credits grant did not have a positive effect on economic growth but it has a negative and significant one on developing countries. Also, the indexes of physical capital, economic openness, human capital and foreign direct investment show a positive and significant effect, and government spending and inflation show a negative and significant effect on growth. The variable related to the great financial crisis of 2008, is also reflects the negative impact of the crisis on economic growth in all developing countries. JEL Classification Codes: C23, O16, G21

Suggested Citation

  • Bahrami, Jaber & Pahlavani, Mosayeb & Jansouz, Parinaz, 2013. "Impact of Bank Credits on Economic Growth in Selected Developing Countries by Using GMM Method (in Persian)," Journal of Monetary and Banking Research (فصلنامه پژوهش‌های پولی-بانکی), Monetary and Banking Research Institute, Central Bank of the Islamic Republic of Iran, vol. 6(15), pages 77-96, June.
    • Handle: RePEc:mbr:jmbres:v:6:y:2013:i:15:p:77-96
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    More about this item

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models

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