The causal nexus between financial development and economic growth in Kenya
Gazi Uddin (),
Bo Sjö and
Muhammad Shahbaz ()
Economic Modelling, 2013, vol. 35, issue C, 701-707
This paper aims to reexamine the relationship between financial development and economic growth in Kenya over the period of 1971–2011. Since the financial sector plays a vital role in mobilizing and allocating savings into productive ventures, the core issue of this investigation remains important for developing economics. The examination is based on a Cobb–Douglas production augmented by incorporating financial development. A simulation based ARDL bounds testing and Gregory and Hansen's structural break cointegration approaches are being utilized in this study. Cointegration is being found between the series in the presence of a structural break in 1992. It is also being established that, in the long run, the development of the financial sector has a positive impact on economic growth. Here remains an important policy implication for the concerned individuals of Kenya, that is, they may emphasize on financial development to ignite economic growth.
Keywords: Economic growth; Financial development; Kenya (search for similar items in EconPapers)
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Working Paper: The Causal Nexus between Financial Development and Economic Growth in Kenya (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecmode:v:35:y:2013:i:c:p:701-707
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