Financial Development, Governance and Economic Growth: A Causal Analysis

James K. Cordor and Genesis B. Kollie

International Journal of Economics and Finance, 2024, vol. 16, issue 8, 84

Abstract: This study seeks to establish the causal relationships among variables of financial sector development, governance quality, and economic growth in Liberia. To achieve this objective, the researchers gathered secondary time series data from the World Development Indicators and the Worldwide Governance Indicators covering the period 1980 to 2019. The Autoregressive Distributed Lag (ARDL) Model and the Granger Causality Test were used for estimations. The estimation results (particularly the Granger Causality Test) found a uni-directional causal relationship flowing from financial sector development to economic growth - implying that economic growth is caused by financial sector development. Among other things, this study recommends that policy measures that are meant to revamp the Liberian economy be channeled through the financial sector; and that the Government, through the Central Bank, ensures that lending interest rates on borrowed funds are kept in minimum range to enable the private sector acquire loanable funds for investment purposes.

Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://ccsenet.org/journal/index.php/ijef/article/download/0/0/50481/54676 (application/pdf)
https://ccsenet.org/journal/index.php/ijef/article/view/0/50481 (text/html)

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:ibn:ijefaa:v:16:y:2024:i:8:p:84

Access Statistics for this article

More articles in International Journal of Economics and Finance from Canadian Center of Science and Education Contact information at EDIRC.
Bibliographic data for series maintained by Canadian Center of Science and Education ().