Does Corruption Increase Financial Development? A Time Series Analysis in Pakistan
The aim of present paper is to investigate the effect of corruption on financial development in Pakistan by using ARDL bounds testing approach to cointegration. The direction of causal relationship between the variables is examined by using VECM granger causality approach. Our empirical findings indicate that corruption promotes financial development. Causality analysis reveals that corruption and financial development are complementary.
|Date of creation:||02 Mar 2011|
|Date of revision:||10 Mar 2011|
|Contact details of provider:|| Postal: |
Web page: http://mpra.ub.uni-muenchen.de
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Naved Ahmad & Shahid Ali, 2010. "Corruption and financial sector performance: A cross-country analysis," Economics Bulletin, AccessEcon, vol. 30(1), pages 303-308.
- Helmut Lütkepohl, 2006.
"Structural vector autoregressive analysis for cointegrated variables,"
AStA Advances in Statistical Analysis,
Springer, vol. 90(1), pages 75-88, March.
- Helmut Luetkepohl, 2005. "Structural Vector Autoregressive Analysis for Cointegrated Variables," Economics Working Papers ECO2005/02, European University Institute.
- Pesaran, M. Hashem & Shin, Yongcheol & Smith, Richard J., 2000.
"Structural analysis of vector error correction models with exogenous I(1) variables,"
Journal of Econometrics,
Elsevier, vol. 97(2), pages 293-343, August.
- Mohammad Hashem Pesaran & Richard J Smith & Yongcheol Shin, 1999. "Structural analysis of vector error correction models with exogenous I(1) variables," ESE Discussion Papers 38, Edinburgh School of Economics, University of Edinburgh.
- Pesaran, M. H. & Shin, Y. & Smith, R. J., 1997. "Structural Analysis of Vector Error Correction Models with Exogenous I(1) Variables," Cambridge Working Papers in Economics 9706, Faculty of Economics, University of Cambridge.
- Mohammad Shahbaz, 2009. "A Reassessment of Finance-Growth Nexus for Pakistan: Under the Investigation of FMOLS and DOLS Techniques," The IUP Journal of Applied Economics, IUP Publications, vol. 0(1), pages 65-80, January.
- repec:ebl:ecbull:v:30:y:2010:i:1:p:303-308 is not listed on IDEAS
- Ehrlich, Isaac, 1977. "The Deterrent Effect of Capital Punishment: Reply," American Economic Review, American Economic Association, vol. 67(3), pages 452-58, June.
- Tilak Abeysinghe & Tan Khay Boon, 1999. "Small sample estimation of a cointegrating vector: an empirical evaluation of six estimation techniques," Applied Economics Letters, Taylor & Francis Journals, vol. 6(10), pages 645-648.
- Muhammad Shahbaz & Khalil Ahmad & A. R. Chaudhary, 2008. "Economic Growth and Its Determinants in Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 47(4), pages 471-486.
- Mohsen Bahmani-Oskooee & Gour G. Goswami, 2005. "The Impact of Corruption on the Black Market Premium," Southern Economic Journal, Southern Economic Association, vol. 71(3), pages 483-493, January.
- M. Hashem Pesaran & Yongcheol Shin & Richard J. Smith, 2001. "Bounds testing approaches to the analysis of level relationships," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 16(3), pages 289-326.
- Bazoumana Ouattara, 2006. "Aid, debt and fiscal policies in Senegal," Journal of International Development, John Wiley & Sons, Ltd., vol. 18(8), pages 1105-1122.
- Johansen, Soren, 1992. "Cointegration in partial systems and the efficiency of single-equation analysis," Journal of Econometrics, Elsevier, vol. 52(3), pages 389-402, June.
- Haug, Alfred A, 2002. " Temporal Aggregation and the Power of Cointegration Tests: A Monte Carlo Study," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 64(4), pages 399-412, September.
- Paul Turner, 2006. "Response surfaces for an F-test for cointegration," Applied Economics Letters, Taylor & Francis Journals, vol. 13(8), pages 479-482.
- Sanjeev Gupta, 1998. "Does Corruption Affect Income Inequality and Poverty?," IMF Working Papers 98/76, International Monetary Fund.
- Johansen, Soren & Juselius, Katarina, 1990. "Maximum Likelihood Estimation and Inference on Cointegration--With Applications to the Demand for Money," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 52(2), pages 169-210, May.
- Muhammad Shahbaz, 2010. "Income inequality-economic growth and non-linearity: a case of Pakistan," International Journal of Social Economics, Emerald Group Publishing, vol. 37(8), pages 613-636, July.
- Mo, Pak Hung, 2001. "Corruption and Economic Growth," Journal of Comparative Economics, Elsevier, vol. 29(1), pages 66-79, March.
- Isaac Ehrlich & Francis T. Lui, 1999. "Bureaucratic Corruption and Endogenous Economic Growth," Journal of Political Economy, University of Chicago Press, vol. 107(S6), pages S270-S293, December.
- Johansen, Soren, 1991. "Estimation and Hypothesis Testing of Cointegration Vectors in Gaussian Vector Autoregressive Models," Econometrica, Econometric Society, vol. 59(6), pages 1551-80, November.
- Ehrlich, Isaac, 1975.
"The Deterrent Effect of Capital Punishment: A Question of Life and Death,"
American Economic Review,
American Economic Association, vol. 65(3), pages 397-417, June.
- Isaac Ehrlich, 1973. "The Deterrent Effect of Capital Punishment: A Question of Life and Death," NBER Working Papers 0018, National Bureau of Economic Research, Inc.
- Khan, Arshad & Qayyum, Abdul & Sheikh, Saeed, 2005.
"Financial Development and Economic Growth: The Case of Pakistan,"
2145, University Library of Munich, Germany, revised 2005.
- Muhammad Arshad Khan & Abdul Qayyum & Saeed Ahmed Sheikh, 2005. "Financial Development and Economic Growth: The Case of Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 44(4), pages 819-837.
- Toni Uhomoibhi ABURIME, 2009.
"Impact of corruption on bank profitability in Nigeria,"
Proceedings of FIKUSZ '09,
in: László Áron Kóczy (ed.), Proceedings of FIKUSZ '09, pages 7-16
Óbuda University, Keleti Faculty of Business and Management.
- Toni Uhomoibhi ABURIME, 2009. "Impact Of Corruption On Bank Profitability In Nigeria," EuroEconomica, Danubius University of Galati, issue 2(23), pages 50-57, december.
- Phillips, Peter C B & Hansen, Bruce E, 1990.
"Statistical Inference in Instrumental Variables Regression with I(1) Processes,"
Review of Economic Studies,
Wiley Blackwell, vol. 57(1), pages 99-125, January.
- Tom Doan, . "FM: RATS procedure to estimate cointegrating vectors using Fully Modified Least Squares," Statistical Software Components RTS00069, Boston College Department of Economics.
- Stephen K. Layson, 1983. "Homicide and Deterrence: Another View of the Canadian Time-Series Evidence," Canadian Journal of Economics, Canadian Economics Association, vol. 16(1), pages 52-73, February.
- Muhammad Shahbaz & S M Aamir Shamim & Naveed Aamir, 2010. "Macroeconomic Environment and Financial Sector’s Performance: Econometric Evidence from Three Traditional Approaches," The IUP Journal of Financial Economics, IUP Publications, vol. 0(1 & 2), pages 103-123, March & J.
When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:29640. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ekkehart Schlicht)
If references are entirely missing, you can add them using this form.