A Further Investigation of the Growth-Finance Nexus in Kenya

Posted: 30 Apr 2014

See all articles by Mahmoud Arayssi

Mahmoud Arayssi

Lebanese American University; Lebanese American University

Ali Fakih

Lebanese American University

Date Written: April 25, 2014

Abstract

This paper focuses on the finance-development nexus investigating the role of financial deepening and trade openness in general and several macroeconomic variables in the economic development of Kenya. Using a vector error-correction model, the paper tries to determine the causal relationships between finance, exports and economic development using a variety of statistical tests in both static and dynamic models. Our finding emphasize the role of financial development and trade openness in improving capital allocation and growth.

Keywords: Kenya, Finance-growth nexus, Causality, VECM, Variance decomposition, impulse response function

JEL Classification: E44, G10, O16

Suggested Citation

Arayssi, Mahmoud and Arayssi, Mahmoud and Fakih, Ali, A Further Investigation of the Growth-Finance Nexus in Kenya (April 25, 2014). Available at SSRN: https://ssrn.com/abstract=2429334

Mahmoud Arayssi (Contact Author)

Lebanese American University ( email )

Lebanese American University
P.O. Box 13-5053 Chouran
Beirut, 1102 2801
Lebanon

HOME PAGE: http://sb.lau.edu.lb/faculty-research/faculty/fa/dr-mahmoud-araissi.php

Lebanese American University

P.O.Box 36
Chouran-Beirut 1102 2801
Byblos
Lebanon

Ali Fakih

Lebanese American University ( email )

P.O.Box 36
Chouran-Beirut 1102 2801
Byblos
Lebanon

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