The Causal Relationship between Economic Growth, Banking Sector Development and Stock Market Development in Selected Middle-East and North African Countries
Economic growth is the major indicator of government’s performances; hence, economists always trying to help policy-makers in this field through accurate recognizing of dynamisms and factor affecting this indicator. On the other hand, financial and monetary markets play a vital role in directing exi...
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| Format: | Article |
| Language: | English |
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EconJournals
2017-09-01
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| Series: | International Journal of Economics and Financial Issues |
| Subjects: | |
| Online Access: | https://dergipark.org.tr/tr/pub/ijefi/issue/32021/354299?publisher=http-www-cag-edu-tr-ilhan-ozturk |
| _version_ | 1797917565017653248 |
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| author | Vahid Puryan |
| author_facet | Vahid Puryan |
| author_sort | Vahid Puryan |
| collection | DOAJ |
| description | Economic growth is the major indicator of government’s performances; hence, economists always trying to help policy-makers in this field through accurate recognizing of dynamisms and factor affecting this indicator. On the other hand, financial and monetary markets play a vital role in directing existing funds in economy toward producing and industrial sectors to improve economic growth. In this regard, some economists believe that expanded financial markets are driving force of economic growth is countries. This research has investigated the causal relationship between economic growth, banking sector development, and stock market development in selected MENA countries during 1988-2012. To measure development of banking and stock market sectors, 4 indexes are introduced that are converting to two general indexes for each sector using decomposition method for principle components. To test causal relationship between economic growths, banking sector and stock market development, Granger causality test based on vector auto regression of error correction has been applied. According to the results of this study, there is a one-way causal relationship from banking sector development toward economic growth, a mutual causal relationship between stock market development and economic growth, and a one-way causal relationship from banking sector development toward stock market. Stock market development has a long-run positive effect on economic growth. |
| first_indexed | 2024-04-10T13:15:20Z |
| format | Article |
| id | doaj.art-e4f75c87188e41f68af29ff312f6e2bf |
| institution | Directory Open Access Journal |
| issn | 2146-4138 |
| language | English |
| last_indexed | 2024-04-10T13:15:20Z |
| publishDate | 2017-09-01 |
| publisher | EconJournals |
| record_format | Article |
| series | International Journal of Economics and Financial Issues |
| spelling | doaj.art-e4f75c87188e41f68af29ff312f6e2bf2023-02-15T16:12:25ZengEconJournalsInternational Journal of Economics and Financial Issues2146-41382017-09-01735755801032The Causal Relationship between Economic Growth, Banking Sector Development and Stock Market Development in Selected Middle-East and North African CountriesVahid PuryanEconomic growth is the major indicator of government’s performances; hence, economists always trying to help policy-makers in this field through accurate recognizing of dynamisms and factor affecting this indicator. On the other hand, financial and monetary markets play a vital role in directing existing funds in economy toward producing and industrial sectors to improve economic growth. In this regard, some economists believe that expanded financial markets are driving force of economic growth is countries. This research has investigated the causal relationship between economic growth, banking sector development, and stock market development in selected MENA countries during 1988-2012. To measure development of banking and stock market sectors, 4 indexes are introduced that are converting to two general indexes for each sector using decomposition method for principle components. To test causal relationship between economic growths, banking sector and stock market development, Granger causality test based on vector auto regression of error correction has been applied. According to the results of this study, there is a one-way causal relationship from banking sector development toward economic growth, a mutual causal relationship between stock market development and economic growth, and a one-way causal relationship from banking sector development toward stock market. Stock market development has a long-run positive effect on economic growth.https://dergipark.org.tr/tr/pub/ijefi/issue/32021/354299?publisher=http-www-cag-edu-tr-ilhan-ozturkstock market development banking sector development economic growth selected middle-east and north african countries |
| spellingShingle | Vahid Puryan The Causal Relationship between Economic Growth, Banking Sector Development and Stock Market Development in Selected Middle-East and North African Countries International Journal of Economics and Financial Issues stock market development banking sector development economic growth selected middle-east and north african countries |
| title | The Causal Relationship between Economic Growth, Banking Sector Development and Stock Market Development in Selected Middle-East and North African Countries |
| title_full | The Causal Relationship between Economic Growth, Banking Sector Development and Stock Market Development in Selected Middle-East and North African Countries |
| title_fullStr | The Causal Relationship between Economic Growth, Banking Sector Development and Stock Market Development in Selected Middle-East and North African Countries |
| title_full_unstemmed | The Causal Relationship between Economic Growth, Banking Sector Development and Stock Market Development in Selected Middle-East and North African Countries |
| title_short | The Causal Relationship between Economic Growth, Banking Sector Development and Stock Market Development in Selected Middle-East and North African Countries |
| title_sort | causal relationship between economic growth banking sector development and stock market development in selected middle east and north african countries |
| topic | stock market development banking sector development economic growth selected middle-east and north african countries |
| url | https://dergipark.org.tr/tr/pub/ijefi/issue/32021/354299?publisher=http-www-cag-edu-tr-ilhan-ozturk |
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