The Nexus between Financial Development and Economic Growth in Lao PDR

Phouphet Kyophilavong, Gazi Salah Uddin and Muhammad Shahbaz

Global Business Review, 2016, vol. 17, issue 2, 303-317

Abstract: The relationship between financial development and economic growth is not conclusive in the existing economics literature. The aim of this article is to test two hypotheses, ‘supply-leading’ hypothesis and ‘demand-following’ hypothesis, using time series data from Laos. The autoregressive distributed lag (ARDL) bounds testing approach to cointegration is used to carry out this task. Our results confirm the presence of feedback effect between both the variables. Financial development promotes economic growth and as a result, economic growth leads to financial development.

Keywords: Finance–growth nexus; ARDL approach; Granger causality; Laos (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (17)

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Working Paper: The Nexus Between Financial Development and Economic Growth in Lao PDR (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:sae:globus:v:17:y:2016:i:2:p:303-317

DOI: 10.1177/0972150915619809

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