The Nexus Between Financial Development and Economic Growth in Lao PDR

Phouphet Kyophilavong, Gazi Salah Uddin and Muhammad Shahbaz

MPRA Paper from University Library of Munich, Germany

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: C1 (search for similar items in EconPapers)
Date: 2014-07-10, Revised 2014-07-14
New Economics Papers: this item is included in nep-gro and nep-sea
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (12)

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Related works:
Journal Article: The Nexus between Financial Development and Economic Growth in Lao PDR (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:57308

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