Banks, Stock Market and Economic Growth: the case of Iran

Anoshirvan Taghipour ()
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Anoshirvan Taghipour: The economic planning department of Vice-Presidency for strategic planning and control ; lecture at University of Tehran

Iranian Economic Review (IER), 2009, vol. 14, issue 1, 19-40

Abstract: The first paper empirically investigates the relationship between banks, stock market and economic growth emphasizing the transmission channels from financial development to growth in Iran using time series methodologies, namely Johansen’s co-integration and Granger causality testing procedures in the context of Error Correction Models (ECM). The findings suggest that in our case study banks affect economic growth mainly through the capital accumulation channel. While, it appears that the stock market does cause growth only through the productivity channel. In contrast, the feedback effect, running causality from growth to finance, was found significant only for the stock market development. Generally, these results strongly support the supply-leading view.

Keywords: Bank Development; Stock Market; Economic growth; Causality; Supply-Leading Hypothesis; Demand-Following Hypothesis; Time Series (search for similar items in EconPapers)
Date: 2009
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eut:journl:v:14:y:2009:i:1:p:19

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