Financial Development and Economic Growth in Selected Asian Economies: A Dynamic Panel ARDL Test

Contemporary Economics (2020), Vol. 14 No. 2, pp. 201-218

18 Pages Posted: 21 Feb 2021

See all articles by Shravani Sharma

Shravani Sharma

Shri Mata Vaishno Devi University (SMVDU-India) - Faculty of Management

Suparn Kumar Sharma

Shri Mata Vaishno Devi University (SMVDU-India) - Faculty of Management

Date Written: June 23, 2020

Abstract

The present endeavor measures the extent of the nexus between financial development and economic growth by utilizing annual macroeconomic panel data for selected 14 Asian economies. The study focuses on the link between the indicators of financial development and economic growth. The results of panel cointegration analysis suggest that there is two-way cointegration relationship from GDP to GCF and BM in short-run as well as in long-run however, the relationship is one-way, that is, from GDP to DCPS as well as from GDP to DCBS. The findings of the present study establish strong indications of the positive long-run relationship among all the selected indicators of financial development and economic growth. Moreover, the present attempt also indicates that gross capital formation and broad money are critical for economic growth and suggests that upliftment of economic growth of the economies improves the development of financial sector.

Keywords: causality, banking sector, panel unit root, panel ARDL

JEL Classification: G21, C23, O40

Suggested Citation

Sharma, Shravani and Sharma, Suparn Kumar, Financial Development and Economic Growth in Selected Asian Economies: A Dynamic Panel ARDL Test (June 23, 2020). Contemporary Economics (2020), Vol. 14 No. 2, pp. 201-218, Available at SSRN: https://ssrn.com/abstract=3732800

Shravani Sharma

Shri Mata Vaishno Devi University (SMVDU-India) - Faculty of Management ( email )

Katra
India

Suparn Kumar Sharma (Contact Author)

Shri Mata Vaishno Devi University (SMVDU-India) - Faculty of Management ( email )

Katra
India

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