Finance-Growth Nexus in Bangladesh? An Empirical Analysis

Amin, Sakib Bin; Hossain, Ridwan Mosharraf

doi:10.18488/journal.aefr/2017.7.2/102.2.152.163

Cited by 7 publications

(12 citation statements)

References 24 publications

(13 reference statements)

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“…Based on bounds testing results, models 1 and 2 tend to be the long-term driving factors in determining the economic growth of Bangladesh. The findings are consistent with those of Bist and Bista [9] of Nepal, R. Pradhan [24] of India, and Amin and Hossain [10] of Bangladesh, which are from the same subcontinent. The results are also in line with Christopoulos and Tsionas [35] of Nigeria, which has a comparable degree of economic development to Bangladesh.…”

Section: Resultssupporting

confidence: 89%

“…Private sector loans transmit additional funds into the financial system, increasing private sector investment and stimulating economic activity within a country. Several Bangladeshi studies, including those by Amin and Hossain [10], Hasan and Barua [21], and M. H. Rahman [41], agree with this outcome. In model 2 of Table 4, the empirical findings show that a 1% increase in M2 results in a 0.0859% growth in real GDP, suggesting that broad money supply has a positive impact on economic growth.…”

Section: Resultsmentioning

confidence: 59%

“…Previous studies on Bangladesh have not been without criticism. For example, a recent study conducted by Amin and Hossain [10] looks into the finance-growth nexus. This study, however, only finds a causal association between the two variables, with no evidence of any other cointegration.…”

Section: Introductionmentioning

confidence: 99%

See 2 more Smart Citations

Finance-Growth Nexus in Bangladesh: Is it Important to Quantify Financial Development?

Golder¹,

Sultana²,

Hossain³

et al. 2021

ujaf

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This study aims to examine empirically whether financial development can promote economic growth in Bangladesh. It employs the Autoregressive Distributed Lag (ARDL) model and takes annual data from 1987 to 2019. This study confirms a cointegrating relationship between financial development and economic growth. The nature of this relationship is unidirectional, running from financial development to economic growth. The outcome of the study confirms that financial development, as proxied by private sector loans and broad money supply, augments economic growth in the long-run. As for the control variables, gross domestic savings show an insignificant impact on economic growth when private sector loans are proxied for financial development. However, it confirms a substantial impact on economic growth when broad money supply is proxied for financial development. More interestingly, trade openness, another control variable, suggests an adverse impact on economic growth in the long-run. However, it has a substantial positive influence on economic growth in the short-run. In the short-run, broad money supply at lag 2 and gross domestic savings significantly affect economic growth when broad money supply is proxied for financial development. The findings of this study advocate that a robust and dynamic financial structure in Bangladesh is a critical success factor for developing the country's economic growth.

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Section: Resultssupporting

confidence: 89%

Section: Resultsmentioning

confidence: 59%

See 1 more Smart Citation

Finance-Growth Nexus in Bangladesh: Is it Important to Quantify Financial Development?

Golder¹,

Sultana²,

Hossain³

et al. 2021

ujaf

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show abstract

“…The Granger causality test is used to check whether the time series variables provide meaningful insights (Amin and Hossain, 2017). Granger (1969Granger ( , 1980Granger ( , 1988) introduced Granger causality, and it has been widely used in empirical literature to check the causation of the variables.…”

Section: Granger Causalitymentioning

confidence: 99%

The Nexus Between Oil Price Shock and the Exchange Rate in Bangladesh

Amin

Audry

Ulfat

2021

IJEEP

Self Cite

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We examine the nexus between oil price and exchange rate for Bangladesh economy by using annual data covering from 1980 to 2018. Given the stationarity properties, the Johansen cointegration and the ARDL bounds cointegration tests find a long-run cointegrating relationship between the variables. We reveal that oil price granger causes exchange rate in the long-run but not in the short-run. According to DOLS and DARDL methods, an increase in oil price appreciates exchange rate by 0.40% and 0.30%. We argue that the central bank's proper monitoring mechanism is necessary to avoid oil price's adverse effects on the exchange rate.

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“…Schumpeter (1911) argued that technological innovation could happen if financial market works efficiently which in turn stimulates economic growth. It is evident that there exist a long run relationship between financial development and economic growth in Bangladesh (Amin and Hossain, 2017). They also identified that weak financial structure is the reason for slow economic growth, and they suggested improving financial structure through proper policy.…”

Section: Introductionmentioning

confidence: 99%

Nexus between Economic Growth, Tourism Revenue and Financial Development in Bangladesh: A Time Series Analysis

Habib¹,

Sharif²,

Hossain³

2019

BER

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The main objective of this study is to analyze the nexus between economic growth, tourism revenue, and financial development in Bangladesh. This paper uses time series data from 1995 to 2016. Advance technique of time series analysis: Johansen Cointegration Approach is used to test the Cointegration among variables. Moreover, the Vector Error Correction (VECM) has been applied to study the long run and short run association among variables. The outcome of this study reveals that the tourism revenue and financial development has positive impact on economic growth in the long run. Variance decomposition and impulse response function also supports the positive association. According to the estimation of Granger Causality also reveals the unilateral direction in short run economic growth to tourism revenue. Providing more credit by financial sector to invest more on infrastructure and promoting Bangladesh as well as insuring proper security for foreign visitors would increase the revenue of this sector, which in turn stimulates economic growth of the country.

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Finance-Growth Nexus in Bangladesh? An Empirical Analysis

Cited by 7 publications

References 24 publications

Finance-Growth Nexus in Bangladesh: Is it Important to Quantify Financial Development?

Finance-Growth Nexus in Bangladesh: Is it Important to Quantify Financial Development?

The Nexus Between Oil Price Shock and the Exchange Rate in Bangladesh

Nexus between Economic Growth, Tourism Revenue and Financial Development in Bangladesh: A Time Series Analysis

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