EconPapers    
Economics at your fingertips  
 

On the causal nature between financial development and economic growth in the Democratic Republic of the Congo: Is it supply leading or demand following?

Christian Pinshi ()

Working Papers from HAL

Abstract: This paper seeks to study and answer the question on the nature and direction of the causality between financial development and economic growth in the Democratic Republic of the Congo (DRC) using data from 2004 to 2019. The long-term relationship not being robust, we opted for the short-term dynamics with the causality test in the sense of Granger to support this question. The results indicated the existence of a one-way causality from economic growth to financial development. This result is in line with the Demand following hypothesis, given the country's economic and financial landscape, which presents a less deep financial system. Consequently, choices of growth policies (increase in knowledge, infrastructure, pleasant business climate, structural reforms, etc.) should be adopted to enhance and develop the Congolese financial system. However, we recognize that once growth is restored and becomes sustainable, financial development could lead to sustained and resilient economic growth.

Keywords: Economic growth; financial development (search for similar items in EconPapers)
Date: 2020-07-14
New Economics Papers: this item is included in nep-fdg
Note: View the original document on HAL open archive server: https://hal.archives-ouvertes.fr/hal-02898899
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
https://hal.archives-ouvertes.fr/hal-02898899/document (application/pdf)

Related works:
Working Paper: On the causal nature between financial development and economic growth in the Democratic Republic of the Congo: Is it supply leading or demand following? (2020) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hal:wpaper:hal-02898899

Access Statistics for this paper

More papers in Working Papers from HAL
Bibliographic data for series maintained by CCSD ().

 
Page updated 2020-09-20
Handle: RePEc:hal:wpaper:hal-02898899