The impact of financial development and macroeconomics variables on economic growth

The impact of financial development and macroeconomics variables on economic growth

Financial development is an important element for an effective and efficient financial sector which assisted in encouraging the economic growth in ensuring the flows of capital are channelled towards the most productive use, minimizing market frictions and reducing transactions costs. The developmen...

Full description

Saved in:
Bibliographic Details
Main Author: Noorhamizah, Abdul Wahab
Format: Thesis
Language:eng
eng
Published: 2017
Subjects:
HG Finance
Online Access:https://etd.uum.edu.my/7372/1/s821658_01.pdf
https://etd.uum.edu.my/7372/2/s821658_02.pdf
Tags: Add Tag
No Tags, Be the first to tag this record!
id my-uum-etd.7372
record_format uketd_dc
institution Universiti Utara Malaysia
collection UUM ETD
language eng
eng
advisor Sabki, Sharmilawati
topic HG Finance
spellingShingle HG Finance
Noorhamizah, Abdul Wahab
The impact of financial development and macroeconomics variables on economic growth
description Financial development is an important element for an effective and efficient financial sector which assisted in encouraging the economic growth in ensuring the flows of capital are channelled towards the most productive use, minimizing market frictions and reducing transactions costs. The development of financial sectors as a main indicator for the country’s economic growth is strongly recognized in the neo-classical views theory. The objective of the study is to determine the impact of financial development (domestic credit to private sector and gross domestic savings) and macroeconomics variables (inflation, real interest rate and trade) on economic growth for 47 of Asian countries. This study employs the unbalanced panel data in 47 of Asian countries for the period of 2000 and 2016. The dependent variable for this study is economic growth and the independent variables consist of domestic credit to private sector, gross domestic savings, inflation, real interest rate and trade. The study discovers the positive relationship between financial development and economic growth. In contrary, the study finds the negative relationship between two macroeconomics variables (inflation and real interest rate) and the economic growth. In addition, the results argue that trade is not the factor that influencing the economic growth. The findings of the study could assist the policy makers for the future policy making efforts.
format Thesis
qualification_name other
qualification_level Master's degree
author Noorhamizah, Abdul Wahab
author_facet Noorhamizah, Abdul Wahab
author_sort Noorhamizah, Abdul Wahab
title The impact of financial development and macroeconomics variables on economic growth
title_short The impact of financial development and macroeconomics variables on economic growth
title_full The impact of financial development and macroeconomics variables on economic growth
title_fullStr The impact of financial development and macroeconomics variables on economic growth
title_full_unstemmed The impact of financial development and macroeconomics variables on economic growth
title_sort impact of financial development and macroeconomics variables on economic growth
granting_institution Universiti Utara Malaysia
granting_department School of Economics, Finance & Banking
publishDate 2017
url https://etd.uum.edu.my/7372/1/s821658_01.pdf
https://etd.uum.edu.my/7372/2/s821658_02.pdf
_version_ 1747828207815491584
spelling my-uum-etd.73722021-05-10T07:55:33Z The impact of financial development and macroeconomics variables on economic growth 2017 Noorhamizah, Abdul Wahab Sabki, Sharmilawati School of Economics, Finance & Banking School of Economics, Finance and Banking HG Finance Financial development is an important element for an effective and efficient financial sector which assisted in encouraging the economic growth in ensuring the flows of capital are channelled towards the most productive use, minimizing market frictions and reducing transactions costs. The development of financial sectors as a main indicator for the country’s economic growth is strongly recognized in the neo-classical views theory. The objective of the study is to determine the impact of financial development (domestic credit to private sector and gross domestic savings) and macroeconomics variables (inflation, real interest rate and trade) on economic growth for 47 of Asian countries. This study employs the unbalanced panel data in 47 of Asian countries for the period of 2000 and 2016. The dependent variable for this study is economic growth and the independent variables consist of domestic credit to private sector, gross domestic savings, inflation, real interest rate and trade. The study discovers the positive relationship between financial development and economic growth. In contrary, the study finds the negative relationship between two macroeconomics variables (inflation and real interest rate) and the economic growth. In addition, the results argue that trade is not the factor that influencing the economic growth. The findings of the study could assist the policy makers for the future policy making efforts. 2017 Thesis https://etd.uum.edu.my/7372/ https://etd.uum.edu.my/7372/1/s821658_01.pdf text eng public https://etd.uum.edu.my/7372/2/s821658_02.pdf text eng public other masters Universiti Utara Malaysia Adnan, N. (2011). Measurement of financial development: A fresh approach. In 8th International Conference on Islamic Economics and Finance. University of Surrey, United Kingdom and Comsats Institute of Information Technology, Islamabad, Pakistan. Adu, G., Marbuah, G., & Mensah, J. T. (2013). Financial development and economic growth in Ghana: Does the measure of financial development matter? Review of Development Finance, 3(4), 192-203. Afzal, M., & Hussain, I. (2010). Export-led growth hypothesis: Evidence from Pakistan. Journal of Quantitative Economics, 8, 130-147. Aizenman, J., Jinjarak, Y., & Park, D. (2015). Financial development and output growth in developing Asia and Latin America: A comparative sectoral analysis (No. w20917). National Bureau of Economic Research. Al-Malkawi, H. A. N., Marashdeh, H. A., & Abdullah, N. (2012). Financial development and economic growth in the UAE: Empirical assessment using ARDL approach to co-integration. International Journal of Economics and Finance, 4(5), 105. Aric, K. H. (2014). The effects of financial development on economic growth in the European Union: A panel data analysis. International Journal of Economic Practices and Theories, 4(4), 466-471. Arrow, K. (1962). Economic welfare and the allocation of resources for invention. In The rate and direction of inventive activity: Economic and social factors (pp. 609-626). Princeton University Press. Azzez, B. A., Kolapo, F. T., & Ajayi, L. B. (2012). Effect of exchange rate volatility on macroeconomic performance in Nigeria. Interdisciplinary journal of contemporary research in business, 4(1), 149-155. Barro, R. J. (2013). Inflation and economic growth. Annals of Economics & Finance, 14(1), 85–109. Bayar, Y. (2014). Financial development and economic growth in emerging Asian Countries. Asian Social Science, 10(9), 8. Bittencourt, M. (2012). Financial development and economic growth in Latin America: Is Schumpeter right? Journal of Policy Modeling, 34(3), 341-355. Busse, M., & Koniger, J. (2012). Trade and economic growth: A re-examination of the empirical evidence (No. 123). Hamburg Institute of International Economics. Chandavarkar, A. (1992). Of finance and development: neglected and unsettled questions. World development, 20(1), 133-142. Chang, T., & Caudill, S. B. (2005). Financial development and economic growth: The case of Taiwan. Applied Economics, 37(12), 1329-1335. Chang, S. H., & Huang, L. C. (2010). The nexus of finance and GDP growth in Japan: Do real interest rates matter? Japan and the World Economy, 22(4), 235-242. Demirguc-Kunt, A., & Levine, R. (2008). Finance, financial sector policies, and long-run growth (Vol. 4469). World Bank Publications. Durusu-Ciftci, D., Ispir, M. S., & Yetkiner, H. (2017). Financial development and economic growth: Some theory and more evidence. Journal of Policy Modeling, 39(2), 290-306. Fattahi, S., Tiatoraj, A., & Moshtaghi, N (2016). Nonlinear relationship between inflation and economic growth. International Academic Journal of Economics, 3(6), 46-61. Goldsmith, R.W., (1969). Financial structure and development. Yale University Press. New Haven, CT. Hasan, R., & Barua, S. (2015). Financial development and economic growth: Evidence from a panel study on South Asian countries. Asian Economic and Financial Review, 5(10),1159-1173. Hansen, B. E., & Seshadri, A. (2013). Uncovering the relationship between real interest rates and economic growth (WP 2013-303). Retirement Research Center University of Michigan Hassan, M. K., Sanchez, B., & Yu, J. S. (2011). Financial development and economic growth: New evidence from panel data. The Quarterly Review of economics and finance, 51(1), 88-104. Kallen, C. (2016). Financial development and economic growth at different income levels. Washington University in St. Louis. Kar, M., Nazlioglu, S., & Agir, H. (2011). Financial development and economic growth nexus in the MENA countries: Bootstrap panel granger causality analysis. Economic modelling, 28(1), 685-693. Keho, Y. (2017). The impact of trade openness on economic growth: The case of Cote d’Ivoire. Cogent Economics & Finance, 5(1), 1332820. Kendall, J. (2012). Local financial development and growth. Journal of Banking & Finance, 36(5), 1548-1562. Lee, C., & Wong, S. Y. (2005). Inflationary threshold effects in the relationship between financial development and economic growth: Evidence from Taiwan and Japan. Journal of Economic Development, 30(1), 49. Liang, Q., & Jian-Zhou, T. (2006). Financial development and economic growth: Evidence from China. China economic review, 17(4), 395-411. Marwa, N., & Zhanje, S. (2015). A review of finance–growth nexus theories: How does development finance fits in? Studies in Business and Economics, 10(1),83-91. McKinnon, R.L (1973). Money and Capital in Economic Development, Washington Mehrara, M., & Ghamati, F. (2014). Financial development and economic growth in developed countries. International Letters of Social and Humanistic Sciences (ILSHS), 25, 75-81. Musila, J. W., & Yihenis, Z. (2015). The impact of trade openness on growth: The case of Kenya. Journal of Policy Modeling, 37(2), 342-354. Mutinda, D. M. (2014). The effect of lending interest rate on economic growth in Kenya. University Of Nairobi. Newbold, P., Carlson, W., & Thorne, B. (2012). Statistics for business and economics. Pearson. Ramlan, H., & Suhaimi (2017). The relationship between interest rates and inflation toward the economic growth in Malaysia. Journal of Humanities, Language, Culture and Business, Vol 1, 55-63. Rasmidatta, P. (2011). The relationship between domestic saving and economic growth and convergence hypothesis: Case study of Thailand. Sodertorn University. Romer, P. M. (1994). New goods, old theory, and the welfare costs of trade restrictions. Journal of Development Economics, 43, 5–38. Samargandi, N., Fidrmuc, J., & Ghosh, S. (2014). Financial development and economic growth in an oil-rich economy: The case of Saudi Arabia. Economic Modelling, 43, 267-278. Sandri, S., Alshyab, N., & Ghazo, A. (2016). Trade in goods and services and its effect on economic growth: The case of Jordan. Applied Econometrics and International Development, 16(2), 113-128. Schumpeter, J. A. (1911). 1934 . The theory of economic development. : An Inquiry into Profits, Capital, Credit, Interest, and the Business Cycle. Translated from the German by Redvers Opie. With an Introduction by John E. Elliott. New Brunswick, NJ: Transaction Publishers. Shaw, E. (1973). Financial deepening in economic development, New York: Oxford University Press. Solow, R. M. (1956). A contribution to the theory of economic growth. The quarterly journal of economics, 70(1), 65-94. Sothan, S. (2014). Causal relationship between domestic saving and economic growth: Evidence from Cambodia. International Journal of Economics and Finance, 6(9), 213. Stiglingh, A. (2015). Financial development and economic growth in BRICS and G-7 countries: A comparative analysis. (Doctoral dissertation, North-West University). Tekin, R. B. (2012). Development aid, openness to trade and economic growth in least developed countries: Bootstrap panel granger causality analysis. Procedia-Social and Behavioral Sciences, 62, 716-721. Were, M. (2015). Differential effects of trade on economic growth and investment: A cross- country empirical investigation. Journal of African Trade, 2(1), 71-85. Wooldridge, J. M. (2015). Introductory econometrics: A modern approach. Nelson Education.

Similar Items