Banking Sector Development and Economic Growth in Lebanon

Ali Awdeh ()

MPRA Paper from University Library of Munich, Germany

Abstract: We study the causality direction between banking sector development and economic growth in Lebanon over the period 1992-2011. Firstly, using Granger Causality tests, we find a one-way causality running from economic growth to banking sector measures such as deposit growth and credit to local private sector. Conversely, credit provided by banks to the resident private sector, and the banking sector size, efficiency, and concentration do not impact significantly economic growth. These results provide support for the demand-following hypothesis regarding the link between financial sector and economic development in Lebanon. Finally, regression estimates using OLS method confirm the above results.

Keywords: Financial Development; Economic Growth; Granger Causality. (search for similar items in EconPapers)
JEL-codes: E52 G21 O11 O23 (search for similar items in EconPapers)
Date: 2012-10
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:121135

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