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The Differential Impact of Financial Intermediation on Economic Growth in Oil-Dependent Economies

Author

Listed:
  • Anthony Anyanwu

    (Lincoln University)

  • Christopher Gan

    (Lincoln University)

  • Baiding Hu

    (Lincoln University)

Abstract

This paper analyses the relationship between bank credit and economic growth. We extend existing literature by treating separately the oil and non-oil sectors of 28 oil-dependent economies from 1990-2012. We employ panel cointegration and pooled mean group estimation techniques which are appropriate for drawing conclusions from dynamic heterogenous panels. The results of the panel cointegration test indicate that bank credit has no significant long-run relationship with non-oil GDP per capita. The results of the pooled mean group estimator reveal no significant long-run impact of bank credit on non-oil GDP per capita. Overall results suggest that banks do not yet provide adequate credit to stimulate non-oil economic growth. The policy implication of our findings is that the financial sector should be more involved in productive investment activities to promote inclusive growth.

Suggested Citation

  • Anthony Anyanwu & Christopher Gan & Baiding Hu, 2018. "The Differential Impact of Financial Intermediation on Economic Growth in Oil-Dependent Economies," Review of Economic Analysis, Digital Initiatives at the University of Waterloo Library, vol. 10(3), pages 267-284, May.
    • Handle: RePEc:ren:journl:v:10:y:2018:i:3:p:267-284
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    Cited by:

    1. Huy Tiet Pham & Christopher Gan & Baiding Hu, 2022. "Causality between Financial Development and Foreign Direct Investment in Asian Developing Countries," JRFM, MDPI, vol. 15(5), pages 1-26, April.

    More about this item

    Keywords

    banks; oil-dependent; non-oil sector; credit; growth;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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