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

European Journal of Social Sciences, Vol. 11, No. 3, 2009

9 Pages Posted: 28 Sep 2010  

Irfan Lal

University of Karachi - Applied Economics Research Centre; Institute of Business Management (IoBM)

Sulaiman D. Muhammad

Federal Urdu University of Arts Science & Technology

Adnan Hussain

Benazir Bhutto Shaheed University, Lyari, Karachi; University of Karachi - Applied Economics Research Centre

M. Anwar Jalil

KASB Institute of Technology (KASBIT)

Date Written: August 27, 2009

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.

Keywords: Financial development, financial structure, Economic growth, Cointegration.

JEL Classification: G2, O4, C4

Suggested Citation

Lal, Irfan and Muhammad, Sulaiman D. and Hussain, Adnan and Jalil, M. Anwar, Effects of Financial Structure and Financial Development on Economic Growth: A Case Study of Pakistan (August 27, 2009). European Journal of Social Sciences, Vol. 11, No. 3, 2009. Available at SSRN: https://ssrn.com/abstract=1683382 or http://dx.doi.org/10.2139/ssrn.1683382

Irfan Lal

University of Karachi - Applied Economics Research Centre ( email )

Main University Road
Karachi University
Karachi, SC Sindh 75270
Pakistan
00923212348843 (Phone)

Institute of Business Management (IoBM) ( email )

Plot # 84
Korangi Creek
Karachi, Sindh 75190
Pakistan

Sulaiman D. Muhammad

Federal Urdu University of Arts Science & Technology ( email )

Sector G-7/1, Main University Road
Gulshan-e-Iqbal
Karachi, Sindh 744000
Pakistan

Adnan Hussain

Benazir Bhutto Shaheed University, Lyari, Karachi ( email )

Faqir Mohammad Dura Khan Road,
Near cheel chowk
Karachi, Sindh 75500
Pakistan

HOME PAGE: http://www.bbsul.edu.pk

University of Karachi - Applied Economics Research Centre ( email )

Mail University Road
Karachi University
Karachi, SC Sind 75270
Pakistan

M. Anwar Jalil (Contact Author)

KASB Institute of Technology (KASBIT) ( email )

Karachi
Pakistan

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