2010
DOI: 10.1080/00036840701721661
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The bounds test approach for cointegration and causality between financial development, international trade and economic growth: the case of Cyprus

Abstract: This study employs the bounds test for co-integration and Granger causality tests to investigate the long-run equilibrium relationship and the direction of causality between financial development, international trade and real income growth for the Cyprus economy. The results of the study reveal that financial development as measured by broad money (M2), international trade and real income growth are cointegrated; thus, a long-run equilibrium relationship can be inferred among these three variables. On the othe… Show more

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Cited by 67 publications
(29 citation statements)
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References 30 publications
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“…Applying the Johansen-Juselius cointegration method and Granger causality test, Jenkins and Katircioglu (2010) explore the long run relationship among international trade, financial development and economic growth for Cyprus. Empirical results imply that there exists a long run relationship between international trade, financial development and economic growth.…”
Section: Introductionmentioning
confidence: 99%
“…Applying the Johansen-Juselius cointegration method and Granger causality test, Jenkins and Katircioglu (2010) explore the long run relationship among international trade, financial development and economic growth for Cyprus. Empirical results imply that there exists a long run relationship between international trade, financial development and economic growth.…”
Section: Introductionmentioning
confidence: 99%
“…In the literature review; there have been very few studies investigating the relationship between foreign trade and the banking sector directly. (Al-Yousif, 2002), (Beck, 2003), (Svaleryd, 2005), (Jordan, 2007), (Jenkins, 2010) and (Shahbaz, 2011), (Zhang, 2012), (Shahbaz, 2014) suggest that exports have positive effects on economic growth in most of these studies . (Tang, 2016) which one of the rare studies on direct export and banking sector relations investigated the development of Eastern and Central European countries exports to other EU countries after inclusion and integration in European Union Financial System in his study and cliamed that one of the reasons for the absence of the positive effect of the bank credit effect on exports is that there is no increase in bank credits for exports despite the presence of the EU bank.…”
Section: Credits/deposits Ratio (Cdr)mentioning
confidence: 90%
“…A favorable tax regime may stimulate FDI flows and also encourage financial transactions between host and parent companies. Jenkins and Katircioglu (2010) find that higher real income stimulates international trade (both exports and imports). Though the impacts of exports, imports, and the tax rate on economic growth are documented, few studies explore their influences on the ADR co-movement.…”
Section: Private Sectormentioning
confidence: 97%