The causality between financial development and economic growth

Case of Asian economies

Research output: Contribution to journalArticle

Abstract

This paper investigates the long run relationship between financial development and economic growth for 16Asian economies with different levels of income using of the system method, which is considered the most efficientmanner. In addition, I employ Park's CCR test to estimate cointegrating vectors and run ordinary ECM as well asSURECM. Based on the results of Granger causality test in system method, I found strong evidence that causalityexists between the financial development and economic growth, evidence that China has a huge impact on Asianeconomy, and a system method is superior to traditional regression methods. The question might give further guidanceas to whether a well-developed financial sector is a necessary condition for a higher growth rates for developingcountries and provide an important policy implication for countries that have financial sectors that are comparativelyunderdeveloped.

Original languageEnglish (US)
Pages (from-to)1071-1082
Number of pages12
JournalEconomics Bulletin
Volume36
Issue number2
StatePublished - Jan 1 2016

Fingerprint

Financial development
Causality
Financial economics
Asian economies
Economic growth
Financial sector
Policy implications
Income
Developing countries
Granger causality test
China
Extracellular matrix
Long-run relationship
Regression method

Cite this

The causality between financial development and economic growth : Case of Asian economies. / Taivan, Ariuna.

In: Economics Bulletin, Vol. 36, No. 2, 01.01.2016, p. 1071-1082.

Research output: Contribution to journalArticle

@article{5afcaea8a51c4c458b3337dfba085756,
title = "The causality between financial development and economic growth: Case of Asian economies",
abstract = "This paper investigates the long run relationship between financial development and economic growth for 16Asian economies with different levels of income using of the system method, which is considered the most efficientmanner. In addition, I employ Park's CCR test to estimate cointegrating vectors and run ordinary ECM as well asSURECM. Based on the results of Granger causality test in system method, I found strong evidence that causalityexists between the financial development and economic growth, evidence that China has a huge impact on Asianeconomy, and a system method is superior to traditional regression methods. The question might give further guidanceas to whether a well-developed financial sector is a necessary condition for a higher growth rates for developingcountries and provide an important policy implication for countries that have financial sectors that are comparativelyunderdeveloped.",
author = "Ariuna Taivan",
year = "2016",
month = "1",
day = "1",
language = "English (US)",
volume = "36",
pages = "1071--1082",
journal = "Economics Bulletin",
issn = "1545-2921",
publisher = "Economics Bulletin",
number = "2",

}

TY - JOUR

T1 - The causality between financial development and economic growth

T2 - Case of Asian economies

AU - Taivan, Ariuna

PY - 2016/1/1

Y1 - 2016/1/1

N2 - This paper investigates the long run relationship between financial development and economic growth for 16Asian economies with different levels of income using of the system method, which is considered the most efficientmanner. In addition, I employ Park's CCR test to estimate cointegrating vectors and run ordinary ECM as well asSURECM. Based on the results of Granger causality test in system method, I found strong evidence that causalityexists between the financial development and economic growth, evidence that China has a huge impact on Asianeconomy, and a system method is superior to traditional regression methods. The question might give further guidanceas to whether a well-developed financial sector is a necessary condition for a higher growth rates for developingcountries and provide an important policy implication for countries that have financial sectors that are comparativelyunderdeveloped.

AB - This paper investigates the long run relationship between financial development and economic growth for 16Asian economies with different levels of income using of the system method, which is considered the most efficientmanner. In addition, I employ Park's CCR test to estimate cointegrating vectors and run ordinary ECM as well asSURECM. Based on the results of Granger causality test in system method, I found strong evidence that causalityexists between the financial development and economic growth, evidence that China has a huge impact on Asianeconomy, and a system method is superior to traditional regression methods. The question might give further guidanceas to whether a well-developed financial sector is a necessary condition for a higher growth rates for developingcountries and provide an important policy implication for countries that have financial sectors that are comparativelyunderdeveloped.

UR - http://www.scopus.com/inward/record.url?scp=84983349812&partnerID=8YFLogxK

UR - http://www.scopus.com/inward/citedby.url?scp=84983349812&partnerID=8YFLogxK

M3 - Article

VL - 36

SP - 1071

EP - 1082

JO - Economics Bulletin

JF - Economics Bulletin

SN - 1545-2921

IS - 2

ER -