Economic Growth and Financial Stability in MENA Countries: Does Exporting Oil Matters?
Emara, Noha, Xiaojun Zhang and Shangchao Liu, (2019). Economic Growth and Financial Stability in MENA Countries: Does Exporting Oil Matter? with Topics in Middle Eastern and African Economies, Middle East Economic Association and Loyola University, September, Chicago, Illinois, USA, 21(2). http
MPRA Paper No. 99312
19 Pages Posted: 14 Apr 2021
Date Written: March 28, 2019
Abstract
Using system panel GMM dynamic panel on a sample of nineteen MENA countries over the period 1990 – 2014, the study estimates the effect of financial stability on economic growth. Using the principal component analysis to create a composite index of financial stability consisting of a banking crisis dummy variable, the ratio of credit to government and state-owned enterprises to GDP, and the ratio of domestic credit to private sector as a percent of GDP, the estimation results show financial stability in the MENA region is important for boosting economic growth in the region. Furthermore, when dividing the sample between oil and non-oil exporters, the results suggests no statistically significant difference between the two groups in terms of the impact of financial stability on economic growth. Our results are robust to the use of different fixed effects and random effects estimation methodologies.
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