Financial development and economic growth: The Egyptian experience

Abu‐Bader, Suleiman; Abu‐Qarn, Aamer S.

doi:10.1016/j.jpolmod.2007.02.001

Cited by 182 publications

(97 citation statements)

References 12 publications

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“…This is a proxy of banking activity, used in numerous studies as an indicator of financial development (Levine, 1997;Beck et al, 2004;Shandre and James, 2004;Abu-Bader and Abu-Qarn, 2008). Financial development could have a positive impact on cost efficiency (Pasiouras, 2008;Lozano-Vivas and Pasiouras, 2010).…”

Section: Data and Variablesmentioning

confidence: 99%

What drives investment bank performance? The role of risk, liquidity and fees prior to and during the crisis

Mamatzakis

Bermpei

2014

International Review of Financial Analysis

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This paper examines factors that affect the performance of investment banks in the G7 and Switzerland. In particular, we focus on the role of risk, liquidity and investment banking fees. Panel analysis shows that those variables significantly impact upon performance as derived from stochastic frontier analysis (SFA). Given our sample also comprises the financial crisis, we further test for regimes switches using dynamic panel threshold analysis. Results show different underlying regimes, in particular over the financial crisis. In addition, a strong positive effect of Z-Score on performance for banks in the regime of low default risk is reported, whilst fee-income ratio has also a positive impact for banks with low level of fees. On the other hand, liquidity exerts a negative impact. Notably, there is a clear trend of mobility of banks across the two identified threshold regimes with regards to risk a year before the financial crisis. Our results provide evidence that recent regulation reforms regarding capital adequacy and liquidity requirements are on the right track and could enhance performance.

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Section: Data and Variablesmentioning

confidence: 99%

What drives investment bank performance? The role of risk, liquidity and fees prior to and during the crisis

Mamatzakis

Bermpei

2014

International Review of Financial Analysis

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“…Small and medium-sized enterprises (SMEs) had difficulties in obtaining credit because of collateral and lack of information. There was a gradual increase of lending to the private sector from an annual average of 19% of the GDP during 1941-1974to around 28% during 1975-1990(Mohieldin, 2000El-Shazly, 2001;Mohieldin & Nasr, 2003;Bolbola et al, 2005;Abu-Bader & Abu-Bader, 2008;Daradkah & Miani, 2011;Elsayed, 2013).…”

Section: Economic Growth Macroeconomic Performance and Banking Systementioning

confidence: 99%

“…Public domestic debt reached 97% of GDP in 2015/2016 whereas its external counterpart represented 18% in the same year. The real GDP growth at factor cost dropped from 3.1% in the first quarter of 2015/2016 to 1.7% in the corresponding quarter a year later (Abu-Bader & Abu-Qarn, 2008;Bolbola et al, 2005;Elsayed, 2013;Herrera & Youssef, 2013;CBE,According to the finance-led growth, also known as supply-leading hypothesis, causality runs from financial sector development to real sector growth. In contrast, the growth-led finance, also known as demand-leading hypothesis, claims that causality runs in the opposite direction.…”

Section: Introductionmentioning

confidence: 99%

“…McKinnon (1973) and Shaw (1973) debated that financial repression hinders financial development and, hence, economic growth. Endogenous growth theories also stressed the importance of financial development for long-run economic growth via the influence of financial sector services on capital accumulation and technological innovation (Abu-Bader & Abu-Qarn, 2008;. However, Robinson (1952) debated that the expansion of real economy drives the demand for financial services and products.…”

Section: Introductionmentioning

confidence: 99%

“…Unlike other research examining this relationship for Egypt (e.g. Abu-Bader & Abu-Qarn, 2008;Elsayed, 2013), the current study employs the longest available time series data of variables under consideration and it assumes that the causal links between them are time-variant. Changes in the developmental level and structural changes in the economy, e.g.…”

Section: Introductionmentioning

confidence: 99%

See 2 more Smart Citations

Bank-Based Financial Development and Economic Growth: Time-Varying Causality Analysis for Egypt

Ahmed¹

2018

IJEF

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The bootstrap approach to Toda-Yamamoto (1995) modified causality test is applied in a rolling window of fixed size onto Egyptian data during 1960-2016 to examine time-varying links between economic growth (EG) and bank-based financial development (BBFD). Full sample results indicated the existence of unidirectional causality running from BBFD to EG, however; instability tests revealed the presence of structural breaks. Given the misleading inferences made using the full sample, the rolling window procedure is applied. Bidirectional time-varying causality between EG and BBFD was detected. Reasons behind declining the fraction of credit provided to private business sector to GDP in recent years include, mainly, credit crunch and expansion of credit to the government and partially to economic slowdown. Adoption of fiscal reforms and promotion of innovative financial tools suitable for the needs of small and medium-sized enterprises is highly recommended to enhance the role of banking system in promoting economic growth.

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Financial development and business cycle volatility nexus in theUAE: Evidence fromnon‐linear regime‐shiftand asymmetric tests

et al. 2021

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This paper analyses the dynamics of financial deepening and the volatility of business cycle in the United Arab of Emirates (UAE). We use cointegration tests of regime‐shift with one and two endogenous structural breaks, respectively, using Gregory and Hansen, Oxford Bulletin of Economics and Statistics, 1996, 58, 555–560 and Hatemi‐J, Empirical Economics, 2008, 35, 497–505 approaches. The asymmetry in the underlying relationship of the concerned variables are examined following NARDL model over the period 1974–2016. The findings suggest the presence of regime shifts in the cointegrating relationship and asymmetry between growth volatility and financial deepening. Furthermore, the paper provides evidence of a significant difference in the response of business cycle to negative or positive changes in the financial deepening, which are more pronounced in the short run. Therefore, the obtained asymmetry suggests that business cycle responses are quick and adverse to changes in the financial system in the UAE. The empirical findings of this paper have potential policy implications in this emerging country that is aiming to establish an international reputation in its financial market and become a regional financial hub.

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Financial development and economic growth: The Egyptian experience

Cited by 182 publications

References 12 publications

What drives investment bank performance? The role of risk, liquidity and fees prior to and during the crisis

What drives investment bank performance? The role of risk, liquidity and fees prior to and during the crisis

Bank-Based Financial Development and Economic Growth: Time-Varying Causality Analysis for Egypt

Financial development and business cycle volatility nexus in theUAE: Evidence fromnon‐linear regime‐shiftand asymmetric tests

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