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Financial development and economic growth : new evidence from six countries

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dc.contributor.advisor Odhiambo, N. M.
dc.contributor.author Nyasha, Sheilla
dc.date.accessioned 2015-05-07T10:09:05Z
dc.date.available 2015-05-07T10:09:05Z
dc.date.issued 2014-10
dc.identifier.citation Nyasha, Sheilla (2014) Financial development and economic growth : new evidence from six countries, University of South Africa, Pretoria, <http://hdl.handle.net/10500/18576> en
dc.identifier.uri http://hdl.handle.net/10500/18576
dc.description.abstract Using 1980 - 2012 annual data, the study empirically investigates the dynamic relationship between financial development and economic growth in three developing countries (South Africa, Brazil and Kenya) and three developed countries (United States of America, United Kingdom and Australia). The study was motivated by the current debate regarding the role of financial development in the economic growth process, and their causal relationship. The debate centres on whether financial development impacts positively or negatively on economic growth and whether it Granger-causes economic growth or vice versa. To this end, two models have been used. In Model 1 the impact of bank- and market-based financial development on economic growth is examined, while in Model 2 it is the causality between the two that is explored. Using the autoregressive distributed lag (ARDL) bounds testing approach to cointegration and error-correction based causality test, the results were found to differ from country to country and over time. These results were also found to be sensitive to the financial development proxy used. Based on Model 1, the study found that the impact of bank-based financial development on economic growth is positive in South Africa and the USA, but negative in the U.K – and neither positive nor negative in Kenya. Elsewhere the results were inconclusive. Market-based financial development was found to impact positively in Kenya, USA and the UK but not in the remaining countries. Based on Model 2, the study found that bank-based financial development Granger-causes economic growth in the UK, while in Brazil they Granger-cause each other. However, in South Africa, Kenya and USA no causal relationship was found. In Australia the results were inconclusive. The study also found that in the short run, market-based financial development Granger-causes economic growth in the USA but that in South Africa and Brazil, the reverse applies. On the other hand bidirectional causality was found to prevail in Kenya in the same period.
dc.format.extent 1 online resource (xxi, 316 leaves)
dc.language.iso en en
dc.subject Financial Development en
dc.subject Bank-Based Financial Development en
dc.subject Market-Based Financial Development en
dc.subject Stock Market Development en
dc.subject ARDL Bounds Testing Approach en
dc.subject Cointegration en
dc.subject Granger-Causality en
dc.subject Kenya en
dc.subject Brazil en
dc.subject South Africa en
dc.subject Australia en
dc.subject United Kingdom en
dc.subject United States of America en
dc.subject.ddc 338.90015195
dc.subject.lcsh Economic development -- Econometric models en
dc.subject.lcsh Finance -- Econometric models en
dc.subject.lcsh Capital -- Econometric models en
dc.subject.lcsh Banks and banking -- Economic aspects -- Econometric models en
dc.subject.lcsh Stock exchanges -- Economic aspects -- Econometric models en
dc.subject.lcsh Markets -- Economic aspects -- Econometric models en
dc.title Financial development and economic growth : new evidence from six countries en
dc.type Thesis en
dc.description.department Economics
dc.description.degree DCOM (Economics)


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