The Nexus Between Financial Development and Economic Growth in Laos

Phouphet Kyophilavong, Gazi Salah Uddin and Muhammad Shahbaz

No 2014-447, Working Papers from Department of Research, Ipag Business School

Abstract: The relationship between financial development and economic growth is not conclusive in existing economics literature. The aim of this paper is to test two hypotheses: ‘supply-leading’ hypothesis and ‘demand-following’ hypothesis, using Laos time series data. The ARDL bounds testing approach to cointegration is used to carry out this task. Our results confirm the presence of feedback effect between both variables. Financial development promotes economic growth and in resulting, economic growth leads financial development.

Keywords: Finance-growth nexus; ARDL approach; Granger causality; Laos (search for similar items in EconPapers)
JEL-codes: O11 O16 O53 (search for similar items in EconPapers)
Pages: 25 pages
Date: 2014-01-01
New Economics Papers: this item is included in nep-gro and nep-sea
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Citations: View citations in EconPapers (15)

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