Financial Sector Development and Economic Growth: Empirical Evidence from Bangladesh

Asian Economic and Financial Review

Md. Nurul Kabir Biplob^1¹ 

[1] Assistant Professor, Department of Finance and Banking, Begum Rokeya University, Rangpur, Bangladesh. Lecturer, Department of Finance and Banking, University of Barisal, Bangladesh^1

关键词: Financial development;    Economic growth;    VECM;    Causality;    Co-integration;    Bangladesh.;   

DOI  :  10.18488/journal.aefr.2018.86.799.814

学科分类：社会科学、人文和艺术（综合）

来源: Asian Economic and Social Society

【 摘 要 】

For centuries, researchers have focused on the question ?Whether the demand for growing financial sector is created by economic development or the financial development influences economic growth?. This paper empirically examines the association between financial development and economic growth in Bangladesh using time series data over the period of 1977-2016. In order to fulfill the main objective it has adopted Johansen Co-integration test and Granger-causality test in Vector Error Correction Model (VECM) framework. The study has found the significant long-run causality from financial development to economic growth in Bangladesh. Furthermore, the investigation confirmed that the disequilibrium in long-run GDP growth rate is corrected by 43.84% in short-run i.e. next following year. In addition, variance relation among the variables has examined by using variance decomposition model. The findings of this study have brought to light the propulsive role of financial development, particularly credit circulation to private sector, in economic activities in Bangladesh.

【 授权许可】

CC BY