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Effects of Financial Structure and Financial Development on Economic Growth: A Case Study of Pakistan

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  • Lal, Irfan
  • Mohammad, Sulaiman D.
  • Hussain, Adnan
  • Jalil, Anwar

Abstract

The object behind this study is to explore the long run association between economic growth and financial structure in Pakistan context. For this purpose we have used the data from the period of 1975 to 2008, and applied Johansen cointegration technique to find out the long run association among the selected variables. Weighted sum of structure activity and structure size of the financial sector is used as a proxy of financial structure. The study finds that the proxy of financial structure is positively correlated with economic growth. The result also pointed out that the channel of transmission mechanism of financial development to growth is efficient to the financial sector not the volume of investment.

Suggested Citation

  • Lal, Irfan & Mohammad, Sulaiman D. & Hussain, Adnan & Jalil, Anwar, 2012. "Effects of Financial Structure and Financial Development on Economic Growth: A Case Study of Pakistan," MPRA Paper 85518, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:85518
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    References listed on IDEAS

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    More about this item

    Keywords

    Financial development; financial structure; Economic growth; Co integration.;
    All these keywords.

    JEL classification:

    • C50 - Mathematical and Quantitative Methods - - Econometric Modeling - - - General
    • E01 - Macroeconomics and Monetary Economics - - General - - - Measurement and Data on National Income and Product Accounts and Wealth; Environmental Accounts
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General

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