The Impact of Financial Development on Economy of Pakistan
Author(s)
Download Full PDF Pages: 01-11 | Views: 798 | Downloads: 171 | DOI: 10.5281/zenodo.3441708
Abstract
This study aims to examine the impact of financial development on economy sector of Pakistan. Regional economic growth and financial development cycles can trace major global and unobserved factors evolved overtime. However, economic growth and financial development are explaining the fluctuations in the economy, which plays an important role for development of any economic sector. Whereas, Augmented Dickey Fuller Test (ADF) and Phillips Perron (PP) test are used to check the individual stationarity of each variable. Augmented Dickey Fuller test is used to estimate the unit root test. Johnson co-integration test is also used to check the long run relationship between the variables. The overall results shows a positive significantly impact of financial development on economic growth of Pakistan, expected some years of nineties when stock markets became in negative figure. However, F- statistics shows overall positive significant impact of the mode
Keywords
financial development, economic sector, fluctuations
References
i. Ali, A. (2013). Financial intermediation and economic growth in Sudan: An empirical investigation, 1970-2011. British Journal of Economics, Management & Trade, 3(4), 332-358.
ii. Al-Yousif, Y. K. (2002). Financial development and economic growth: another look at the evidence from developing countries. Review of Financial Economics, 11(2), 131-150.
iii. Arabi, A. M. K. (2014). The Effect of Financial Development on Economic Growth in Sudan: Evidence from VECM Model. International Journal of Economics and Finance, 6(11), 72.
iv. Beck, T., Levine, R., & Loayza, N. (2000). Finance and the Sources of Growth. Journal of financial economics, 58(1), 261-300.
v. Bozic, K. J., Smith, A. R., Hariri, S., Adeoye, S., Gourville, J., Maloney, W. J., ... & Rubash, H. E. (2007). The 2007 ABJS Marshall Urist Award: The impact of direct-to-consumer advertising in orthopaedics. Clinical orthopaedics and related research, 458, 202-219.
vi. Calderón, C., & Liu, L. (2003). The direction of causality between financial development and economic growth. Journal of development economics,72(1), 321-334.
vii. Calderon, C., & Servén, L. (2003). The output cost of Latin America’s infrastructure gap. The limits of stabilization: Infrastructure, public deficits, and growth in Latin America, 95-118.
viii. Chang, H. J. (2002). Kicking away the ladder: development strategy in historical perspective. Anthem Press.
ix. Christopoulos, D. K., & Tsionas, E. G. (2004). Financial development and economic growth: evidence from panel unit root and cointegration tests.Journal of development Economics, 73(1), 55-74.
x. Demetriades, P. O., & Hussein, K. A. (1996). Does financial development cause economic growth? Time-series evidence from 16 countries. Journal of development Economics, 51(2), 387-411.
xi. Dornbusch, R., & Reynoso, A. (1989). Financial factors in economic development.
xii. Engle, R. F., & Granger, C. W. (1987). Co-integration and error correction: representation, estimation, and testing. Econometrica: journal of the Econometric Society, 251-276.
xiii. Goldsmith, W., Blakelv, E. J., Bornstein, L., Campt, D., & Mueller, E. (1969). d Development.
xiv. Gupta, A. K., Raj, S. P., & Wilemon, D. (1986). A model for studying R&D. Marketing interface in the product innovation process. The Journal of Marketing, 7-17.
xv. Guryay, E., Safakli, O. V., & Tuzel, B. (2007). Financial development and economic growth: Evidence from Northern Cyprus. International Research Journal of Finance and Economics, 8(2), 57-62.
xvi. Gurley, J. G., & Shaw, E. S. (1955). Financial aspects of economic development. The American Economic Review, 45(4), 515-538.
xvii. Hasan, I., Wachtel, P., & Zhou, M. (2009). Institutional development, financial deepening and economic growth: Evidence from China. Journal of Banking & Finance, 33(1), 157-170.
xviii. Johansen, S., & Juselius, K. (1990). Maximum likelihood estimation and inference on cointegration—with applications to the demand for money.Oxford Bulletin of Economics and statistics, 52(2), 169-210.
xix. Johansen, S. (1988). Statistical analysis of cointegration vectors. Journal of economic dynamics and control, 12(2), 231-254.
xx. Kalyoncu, H., Artan, S., Tezekici, S., & Ozturk, I. (2008). Currency devaluation and output growth: an empirical evidence from OECD countries. International Research Journal of Finance and Economics, 14(2), 232-238.
xxi. King, R. G., & Levine, R. (1993). Finance, entrepreneurship and growth. Journal of Monetary economics, 32(3), 513-542.
xxii. Khan, M. S., & Senhadji, A. S. (2003). Financial development and economic growth: A review and new evidence. Journal of African Economies, 12(suppl 2), ii89-ii110.
xxiii. Lartey, E. K. (2010). A note on the effect of financial development on economic growth. Applied Economics Letters, 17(7), 685-687.
xxiv. Lartey, E. K., & Farka, M. (2011). Financial development, crises and growth.Applied Economics Letters, 18(8), 711-714.
xxv. Levine, R., & Zervos, S. (1998). Stock markets, banks, and economic growth. American economic review, 537-558.
xxvi. Levine, R. (1997). Financial development and economic growth: views and agenda. Journal of economic literature, 35(2), 688-726.
xxvii. Lucas, R. E. (1988). On the mechanics of economic development. Journal of monetary economics, 22(1), 3-42.
xxviii. Mauro, P. (1995). Corruption and growth. The quarterly journal of economics, 681-712.
xxix. McKinnon, R. I. (1973). Money and capital in economic development. Brookings Institution Press.
xxx. Neusser, K., & Kugler, M. (1998). Manufacturing growth and financial development: evidence from OECD countries. Review of economics and statistics, 80(4), 638-646.
xxxi. Odhiambo, N. M. (2009). Electricity consumption and economic growth in South Africa: A trivariate causality test. Energy Economics, 31(5), 635-640.
xxxii. Rogaly, B., & Taylor, B. (2010). ‘They Called Them Communists Then… What D'You Call ‘Em No? Narratives of British Military Expatriates in the Context of the New Imperialism. Journal of ethnic and migration studies, 36(8), 1335-1351.
xxxiii. Schumpeter, J. A. (1911). 1934. The theory of economic development.
xxxiv. Shabbir, M. S. (2014). The impact of human resource practices on employee perceived performance in pharmaceutical sector of Pakistan. African Journal of Business Management, 8(15), 626-632.
xxxv. Shabbir, M. S. (2014). The Level of Entrepreneurship Growth and Obstacles In Trade Openness: A Comparative Study Of Asian Countries Pakistan, India And Malaysia. Journal of Contemporary Management, 3(4), 33-47.
xxxvi. Shabbir MS (2015) Innovation and Competitiveness Lead to Industrial Trade. Business and Economics Journal, Vol 6(4): 181.
xxxvii. Shabbir MS (2015) Why Manufacturers are Less Powerful than Retailers in Trade Circles? A Case Study of Wal-Mart Retailing Businesses. Business and Economics Journal, Vol 6 (4): 177.
xxxviii. Shahzad M, Rehman A (2015) Barriers to Service Quality in the Banks of Pakistan: A Comparative Study of Islamic and Conventional Banks. Business and Economics Journal, Vol 6 (4): 178
xxxix. Shabbir et al,. (2016) Impact of Social Media Applications on Small Business Entrepreneurs. Management and Economics Research Journal, Vol. 2, Pages 1–6
xl. Tobin, J. (1965). Money and economic growth. Econometrica: Journal of the Econometric Society, 671-684.
Cite this Article: