Finance and growth: Evidence from the ARF countries

Rudra P. Pradhan, Mak Arvin, Sahar Bahmani, John H. Hall and Neville R. Norman

The Quarterly Review of Economics and Finance, 2017, vol. 66, issue C, 136-148

Abstract: This paper examines the relationships between economic growth and four different types of financial development in ASEAN Regional Forum (ARF) countries over the period 1991–2011. Using principal component analysis (PCA) to construct development indices, and a panel vector auto-regressive model to test for Granger causalities, the study demonstrates unidirectional and bidirectional causality between the variables. The study enhances understanding of the interrelationship between the variables, combining different strands of the literature, and investigating countries previously neglected in this context. The paper recommends making banking more accessible to residents without bank accounts in ARF countries and promoting stock market development to facilitate access to investment capital in order to enhance economic growth.

Keywords: Financial development; Economic growth; PCA; Granger causality; ARF countries (search for similar items in EconPapers)
JEL-codes: E31 E44 O16 O43 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (35)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:quaeco:v:66:y:2017:i:c:p:136-148

DOI: 10.1016/j.qref.2017.01.011

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