IDEAS home Printed from https://ideas.repec.org/p/hal/journl/hal-04745604.html
   My bibliography  Save this paper

What Is The Role Of The Banking Sector In Economic Growth? Case of Tunisian Banks

Author

Listed:
  • Souad Hammami

    (MOFID-Université de Sousse)

  • Mounir Smida

    (MOFID-Université de Sousse)

Abstract

The objective of this article is to test the impact of a financial system inspired mainly by the banking sector on the economic growth in Tunisia. In this work uses annual data from 1980 to 2017. We have used four proxies of Financial Development (DF) with reference to the banking sector, namely Broad Money (M2), Domestic Credit to the Private Sector (DCPS), Credit domestic by banking sector (DCBS), and bank deposits (BDL). Control variables, such as trade (TRADE), government expenditure (govexp), and gross domestic savings (GDS), were added to the analysis. The results revealed that there is a positive relationship and statistically significant difference between financial development and economic growth. However, BDLs are positive but statistically insignificant, and M2 is negative and statistically insignificant. Also, unidirectional and bidirectional causality was found between the variables. Indeed, there is an urgent need for a robust banking sector to ensure long-term sustainable economic growth.

Suggested Citation

  • Souad Hammami & Mounir Smida, 2022. "What Is The Role Of The Banking Sector In Economic Growth? Case of Tunisian Banks," Post-Print hal-04745604, HAL.
    • Handle: RePEc:hal:journl:hal-04745604
    DOI: 10.51550/nijefr.71.24.31
    Note: View the original document on HAL open archive server: https://hal.science/hal-04745604v1
    as

    Download full text from publisher

    File URL: https://hal.science/hal-04745604v1/document
    Download Restriction: no
    File URL: https://libkey.io/10.51550/nijefr.71.24.31?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Jalil, Abdul & Feridun, Mete, 2011. "The impact of growth, energy and financial development on the environment in China: A cointegration analysis," Energy Economics, Elsevier, vol. 33(2), pages 284-291, March.
    2. Demetriades, Panicos O. & Hussein, Khaled A., 1996. "Does financial development cause economic growth? Time-series evidence from 16 countries," Journal of Development Economics, Elsevier, vol. 51(2), pages 387-411, December.
    3. Rousseau, Peter L & Wachtel, Paul, 1998. "Financial Intermediation and Economic Performance: Historical Evidence from Five Industrialized Countries," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 30(4), pages 657-678, November.
    4. Robert G. King & Ross Levine, 1993. "Finance and Growth: Schumpeter Might Be Right," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 108(3), pages 717-737.
    5. Arestis, Philip, et al, 2002. "The Impact of Financial Liberalization Policies on Financial Development: Evidence from Developing Economies," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 7(2), pages 109-121, April.
    6. Andre C Jordaan & Joel Hinaunye Eita, 2007. "Export And Economic Growth In Namibia: A Granger Causality Analysis," South African Journal of Economics, Economic Society of South Africa, vol. 75(3), pages 540-547, September.
    7. Henryk Gurgul & Łukasz Lach & Roland Mestel, 2012. "The relationship between budgetary expenditure and economic growth in Poland," Central European Journal of Operations Research, Springer;Slovak Society for Operations Research;Hungarian Operational Research Society;Czech Society for Operations Research;Österr. Gesellschaft für Operations Research (ÖGOR);Slovenian Society Informatika - Section for Operational Research;Croatian Operational Research Society, vol. 20(1), pages 161-182, March.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Souad HAMMAMI* & Mounir SMIDA, 2022. "What Is The Role Of The Banking Sector In Economic Growth? Case of Tunisian Banks," Noble International Journal of Economics and Financial Research, Noble Academic Publsiher, vol. 7(1), pages 24-31, March.
    2. Alessandra Dal Colle, 2011. "Finance–growth nexus: does causality withstand financial liberalization? Evidence from cointegrated VAR," Empirical Economics, Springer, vol. 41(1), pages 127-154, August.
    3. Md Nain & Bandi Kamaiah, 2014. "Financial development and economic growth in India: some evidence from non-linear causality analysis," Economic Change and Restructuring, Springer, vol. 47(4), pages 299-319, November.
    4. Shahbaz, Muhammad & Hoang, Thi Hong Van & Mahalik, Mantu Kumar & Roubaud, David, 2017. "Energy consumption, financial development and economic growth in India: New evidence from a nonlinear and asymmetric analysis," Energy Economics, Elsevier, vol. 63(C), pages 199-212.
    5. Hondroyiannis, George & Lolos, Sarantis & Papapetrou, Evangelia, 2005. "Financial markets and economic growth in Greece, 1986-1999," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 15(2), pages 173-188, April.
    6. Bordo, Michael D. & Rousseau, Peter L., 2006. "Legal-political factors and the historical evolution of the finance-growth link," European Review of Economic History, Cambridge University Press, vol. 10(3), pages 421-444, December.
    7. repec:rfh:jprjor:v:8:y:2022:i:3:p:81-97 is not listed on IDEAS
    8. Peter L. Rousseau & Paul Wachtel, 2015. "Episodes of Financial Deepening: Credit Booms or Growth Generators?," Working Papers 15-09, New York University, Leonard N. Stern School of Business, Department of Economics.
    9. Najia Saqib, 2015. "Review of Literature on Finance-Growth Nexus," Journal of Applied Finance & Banking, SCIENPRESS Ltd, vol. 5(4), pages 1-11.
    10. Tian, Renfang & Xu, Jingjing & Feng, Hui & McFarlane, Adian, 2024. "A maximum entropy bootstrap approach to financial development and economic growth in China," Economic Systems, Elsevier, vol. 48(4).
    11. Levine, Ross, 2005. "Finance and Growth: Theory and Evidence," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 12, pages 865-934, Elsevier.
    12. Matthew Jaremski & Peter L. Rousseau, 2013. "Banks, Free Banks, And U.S. Economic Growth," Economic Inquiry, Western Economic Association International, vol. 51(2), pages 1603-1621, April.
    13. Cândida Ferreira, 2021. "Panel Granger Causality Between Financial Development and Economic Growth," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 27(4), pages 333-335, November.
    14. Jakhongir Kakhkharov & Alexandr Akimov, 2018. "Financial development in less-developed post-communist economies," Discussion Papers in Finance finance:201801, Griffith University, Department of Accounting, Finance and Economics.
    15. Yaya Keho, 2010. "Effect of Financial Development on Economic Growth: Does Inflation Matter? Time Series Evidence from the UEMOA Countries," International Economic Journal, Taylor & Francis Journals, vol. 24(3), pages 343-355.
    16. Michael Adusei, 2013. "Financial Development and Economic Growth: Evidence from Ghana," The International Journal of Business and Finance Research, The Institute for Business and Finance Research, vol. 7(5), pages 61-76.
    17. Thorsten Beck, 2009. "The Econometrics of Finance and Growth," Palgrave Macmillan Books, in: Terence C. Mills & Kerry Patterson (ed.), Palgrave Handbook of Econometrics, chapter 25, pages 1180-1209, Palgrave Macmillan.
    18. Abdulkadir Abdulrashid Rafindadi & Almustapha A Aliyu, 2017. "Growing the Growth of the Ghanaian Economy: Is the Function of the Countrys Financial Development of Any Significance?," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 7(2), pages 206-221, February.
    19. Cotter, Christopher & Rousseau, Peter L. & Vu, Nam T., 2021. "Electrification, telecommunications, and the finance-growth nexus: Evidence from firm-level data," Energy Economics, Elsevier, vol. 94(C).
    20. Peia, Oana & Roszbach, Kasper, 2015. "Finance and growth: Time series evidence on causality," Journal of Financial Stability, Elsevier, vol. 19(C), pages 105-118.
    21. repec:rnp:ppaper:mn38 is not listed on IDEAS
    22. Maswana, Jean-Claude, 2006. "An empirical investigation around the finance-growth puzzle in China with a particular focus on causality and efficiency considerations," MPRA Paper 3946, University Library of Munich, Germany, revised Apr 2006.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hal:journl:hal-04745604. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: CCSD (email available below). General contact details of provider: https://hal.archives-ouvertes.fr/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.