The Differential Impact of Financial Intermediation on Economic Growth in Oil-Dependent Economies

Review of Economic Analysis 10 (2018), 267-284

18 Pages Posted: 6 Jun 2019

See all articles by Anthony Anyanwu

Anthony Anyanwu

Lincoln University (NZ)

Christopher Gan

Lincoln University (NZ)

Baiding Hu

Lincoln University (NZ)

Date Written: October 1, 2018

Abstract

This paper analyses the relationship between bank credit and economic growth. We extend existing literature by treating separately the oil and non-oil sectors of 28 oil-dependent economies from 1990-2012. We employ panel cointegration and pooled mean group estimation techniques which are appropriate for drawing conclusions from dynamic heterogenous panels. The results of the panel cointegration test indicate that bank credit has no significant long-run relationship with non-oil GDP per capita. The results of the pooled mean group estimator reveal no significant long-run impact of bank credit on non-oil GDP per capita. Overall results suggest that banks so not yet provide adequate credit to stimulate non-oil economic growth. The policy implication of our findings is that the financial sector should be more involved in productive investment activities to promote inclusive growth.

Keywords: Banks, oil-dependent, non-oil sector, credit, growth

JEL Classification: E02, O11, G21, E51

Suggested Citation

Anyanwu, Anthony and Gan, Christopher and Hu, Baiding, The Differential Impact of Financial Intermediation on Economic Growth in Oil-Dependent Economies (October 1, 2018). Review of Economic Analysis 10 (2018), 267-284, Available at SSRN: https://ssrn.com/abstract=3387381

Anthony Anyanwu (Contact Author)

Lincoln University (NZ) ( email )

PO Box 85084
Ellesmere Junction Road/Springs Road
Lincoln, 7647
New Zealand

Christopher Gan

Lincoln University (NZ) ( email )

PO Box 85084
Ellesmere Junction Road/Springs Road
Lincoln, 7647
New Zealand

Baiding Hu

Lincoln University (NZ) ( email )

PO Box 85084
Ellesmere Junction Road/Springs Road
Lincoln, 7647
New Zealand

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