What Is the role of Financial Development and Energy Consumption on Economic Growth? New Evidence from North African Countries

International Journal of Finance & Banking Studies, Vol. 3, No. 1, 2014

Posted: 6 Oct 2016

See all articles by Doaa Abdou

Doaa Abdou

MSA UNIVERSITY

Eyad Atya

Zaggazig University - Department of Economics

Date Written: 2014

Abstract

This paper aims to test the validity of the causality between financial development and economic growth on energy consumption in three of North African countries. The study employs error correction model and Granger causaility test to analyze a dataset for three North African countries covering a period from 1980 to 2010. The applied model is based on demand function for energy to assess the existing of causal relationship of energy with financial development, and economic growth, in Algeria, Egypt, and Tunisia. Empirical results provide a positive significant relating financial development and energy consumption in Algeria, and Tunisia. On the other hand, Egypt’s results show a negative significant relationship relating energy consumption and financial development. The paper is valuable to policy makers in North African countries in their pursuit for achieving economic growth as it clarifies the urge for the financial development reforms to stimulate investment and growth.

Keywords: Financial Development; Economic Growth; Energy consumption

JEL Classification: F43, Q43, R32

Suggested Citation

Salman, Doaa and Atya, Eyad, What Is the role of Financial Development and Energy Consumption on Economic Growth? New Evidence from North African Countries (2014). International Journal of Finance & Banking Studies, Vol. 3, No. 1, 2014, Available at SSRN: https://ssrn.com/abstract=2848716

Eyad Atya

Zaggazig University - Department of Economics

44519
Egypt

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