Banking sector development and economic growth in ARF countries: the role of stock markets

Rudra P. Pradhan, Sasikanta Tripathy, Shashikant Pandey and Samadhan K. Bele

Macroeconomics and Finance in Emerging Market Economies, 2014, vol. 7, issue 2, 208-229

Abstract: The paper examines the long-run relationship between banking sector development, stock market development and economic growth in 26 ASEAN regional forum (ARF) countries for the period 1961-2012. Using principal component analysis for the construction of development indices and panel vector auto-regressive model for testing the Granger causalities, the study shows that a long-run relationship between banking sector development, stock market development and economic growth exists in ARF countries. The study also uniquely finds the existence of bidirectional causality between banking sector development and economic growth and a unidirectional causality from stock market development to economic growth. It, however, reveals the existence of unidirectional or bidirectional causal links between banking sector development and stock market development. Hence, future studies on economic growth that exclude the dynamic interrelationship of these variables will be unreliable.

Date: 2014
References: View complete reference list from CitEc
Citations: View citations in EconPapers (9)

Downloads: (external link)
http://hdl.handle.net/10.1080/17520843.2014.913071 (text/html)
Access to full text is restricted to subscribers.

Related works:
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:taf:macfem:v:7:y:2014:i:2:p:208-229

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/REME20

DOI: 10.1080/17520843.2014.913071

Access Statistics for this article

Macroeconomics and Finance in Emerging Market Economies is currently edited by Subrata Sarkar and Ashima Goyal

More articles in Macroeconomics and Finance in Emerging Market Economies from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().