Does Financial Development Induce Economic Growth in UAE? The Role of Capitalization and Foreign Direct Investment

Rashid Sbia and Sahel Alrousan
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Sahel Alrousan: Ministry of Finance, UAE
Authors registered in the RePEc Author Service: سهل الروسان

International Journal of Economics and Financial Issues, 2016, vol. 6, issue 2, 703-710

Abstract: This paper examines the association between financial progress and economic growth in the United Arab Emirates over the period 1975Q1-2012Q4. We have employed Bayer and Hanck (2013) combined non-cointegration to test the long run relationship. Our analysis revealed the existence of cointegration between financial development and economic growth. It also revealed that capitalization and foreign direct investment (FDI) stimulate economic growth. The findings suggest that proper use of FDI and financial policy redesign will sustain economic growth in long term

Keywords: Financial Development; Foreign Direct Investment; Capital investment; Growth; UAE (search for similar items in EconPapers)
JEL-codes: C32 E22 F43 G18 G28 (search for similar items in EconPapers)
Date: 2016
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