Financial Developent and Economic Growth Nexus: Time Series Evidence from Middle Eastern and North African Countries

Suleiman Abu-Bader () and Aamer Abu-Qarn ()

MPRA Paper from University Library of Munich, Germany

Abstract: This paper examines the causal relationship between financial development and economic growth in five Middle Eastern and North African (MENA) countries for different periods ranging from 1960 to 2004, within a trivariate vector autoregressive (VAR) framework. We employ four different measures of financial development and apply Granger causality tests using the cointegration and vector error-correction (VEC) methodology. Our empirical results show weak support for a long-run relationship between financial development and economic growth, and for the hypothesis that finance leads growth. In cases where cointegration was detected, Granger causality was either bidirectional or it ran from output to financial development.

Keywords: Financial development; Economic growth; MENA; Granger causality; Error-correction models; Cointegration (search for similar items in EconPapers)
JEL-codes: G18 G28 O16 (search for similar items in EconPapers)
Date: 2006
New Economics Papers: this item is included in nep-afr and nep-fdg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (16)

Published in Review of Development Economics 4.12(2008): pp. 803-817

Downloads: (external link)
https://mpra.ub.uni-muenchen.de/972/1/MPRA_paper_972.pdf original version (application/pdf)

Related works:
Working Paper: Financial Development and Economic Growth Nexus:Time Series Evidence from Middle Eastern and North African Countries (2006)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:972

Access Statistics for this paper

More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Joachim Winter ().