Relationship between Financial Sector Development and Sustainable Economic Development: Time Series Analysis from Pakistan

Anwar, Sofia; Ghulam, Shabir; Hussain, Zakir

doi:10.5539/ijef.v3n1p262

Cited by 14 publications

(7 citation statements)

References 30 publications

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“…For instance, the feedback hypothesis between financial development and economic growth indicates that financial development boosts economic growth by supplying financial resources to profit oriented investment projects, that is, the supply side, and as a result, financial development is increased because of the rising demand for financial services due to stimulation in the economic growth process, that is, the demand side. This evidence supports the findings of Sofia et al (2010) who reported that financial development leads economic growth in case of Pakistan.…”

Section: Vecm Granger Causality Analysissupporting

confidence: 92%

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The Dynamic of Financial Development, Imports, Foreign Direct Investment and Economic Growth: Cointegration and Causality Analysis in Pakistan

Shahbaz

Rahman

2012

Global Business Review

118

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The article investigates the effect of financial development, imports and foreign direct investment (FDI) on economic growth in case of Pakistan over the period of 1990–2008 using quarterly data set. The Autoregressive Distributed Lag (ARDL) bounds testing approach is applied to examine the long-run relationship and the direction of causality is investigated using the Vector Error Correction Model (VECM) framework between the variables. Our findings confirm the existence of cointegration, showing long-run relation between financial development, imports, FDI and economic growth. Financial development, imports and FDI have a positive and significant effect on economic growth of the country. Causality analysis reveals a bidirectional relation among the variables but strong causality is also running from financial development, economic growth and FDI to real imports.

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Section: Vecm Granger Causality Analysissupporting

confidence: 92%

“…demand side. This evidence supports the findings of Sofia et al (2010) who reported that financial development leads economic growth in case of Pakistan.…”

Section: Vecm Granger Causality Analysissupporting

confidence: 82%

The Dynamic of Financial Development, Imports, Foreign Direct Investment and Economic Growth: Cointegration and Causality Analysis in Pakistan

Shahbaz

Rahman

2012

Global Business Review

118

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“…Sustainable development as a concept captures both short-and longterm dimensions, being viable today and mindful of the future. However, financial development activities and goals are targeted toward immediate needs, which are not always of optimum benefit to the society (Acemoglu & Wolitzky, 2015;Anwar, Shabir & Hussain, 2011). Sustainable development is a focus of activities and deliberate actions to development today, bearing the future in mind.…”

Section: Literature Reviewmentioning

confidence: 99%

Investigating the causality between financial inclusion, financial development and sustainable development in Sub‐Saharan Africa economies: The mediating role of foreign direct investment

Odugbesan

Ike

Olowu

et al. 2020

Journal of Public Affairs

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In developing economies, the role of the financial sector and foreign capital in the stimulation of sustainable production practices has not been very clear cut. In a bid to obtain a much clearer empirical perspective, the present study investigates the causal relationship between financial development, financial inclusion, foreign direct investment (FDI) and sustainable development in a panel of 33 Sub-Saharan African (SSA) economies within the 2004-2018 study periods. Panel cointegration tests uncover the presence of a long-run relationship among the variables in the model.Prior to determining the direction of causality, panel estimation procedures show the magnitude and signs of the long run coefficients. Panel Granger causality tests uncover bidirectional causality between financial inclusion and FDI as well as between financial development and FDI. Also uncovered is unidirectional causality from FDI towards sustainable development and resource rents. This study suggests that the policymakers in SSA should optimize the level of financial development which requires a vigorous improvement so as to ensure higher potential benefits for the sustainability of SSA region through financial sector.

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“…Before examining the dynamic long-and the short-run relationship of human capital and innovation capacity towards economic growth, this study first employs a test for determining the order of integration for each variable. The unit root test is performed using ADF and PP to ensure that there is no variable integrated at I(2) and to avoid misleading estimates or spurious result (Sofia & Ghulam 2011). According to Tursoy and Resatoglu (2017), the unit root test is essential to obtain unbiased test results from empirical studies to determine an equilibrium relationship between variables.…”

Section: Resultsmentioning

confidence: 99%

The Role of Human Capital and Innovation Capacity on Economic Growth in ASEAN-3

2018

JEM

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Human capital and innovation capacity are vital for driving economic growth. This study investigates the relationship between human capital and innovation capacity and its impact on economic growth in selected ASEAN countries, namely Malaysia, Indonesia, and Thailand. This study uses the Autoregressive Distributed Lag (ARDL) model through Bounds testing approach and the Error Correction Model (ECM) to examine the existence of long-and short-run relationships among variables. Human capital is proxied by tertiary enrolment (TER) and government expenditure on education (GEX). Meanwhile, the patent application (PTT) and high technology exports (HEX) reflect the innovation capacity. Using annual data for the periods from 1985 to 2015, the findings present substantial evidence for the existence of a long-run relationship between human capital and innovation capacity for the economic growth in Indonesia and Thailand. This study found that there is no long-run relationship between human capital and innovation capacity for the economic growth in Malaysia. The level of economic growth in Malaysia indicates that it has achieved the status of a medium to high-income nation. The policy implications suggest the need to strengthen the capability of ASEAN countries as 'innovator' countries instead of 'user' countries.

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Relationship between Financial Sector Development and Sustainable Economic Development: Time Series Analysis from Pakistan

Cited by 14 publications

References 30 publications

The Dynamic of Financial Development, Imports, Foreign Direct Investment and Economic Growth: Cointegration and Causality Analysis in Pakistan

The Dynamic of Financial Development, Imports, Foreign Direct Investment and Economic Growth: Cointegration and Causality Analysis in Pakistan

Investigating the causality between financial inclusion, financial development and sustainable development in Sub‐Saharan Africa economies: The mediating role of foreign direct investment

The Role of Human Capital and Innovation Capacity on Economic Growth in ASEAN-3

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