Financial Development and Economic Growth in Egypt: A Re-investigation

Kamal, Mona (2013): Financial Development and Economic Growth in Egypt: A Re-investigation.

Abstract

In light of the political and economic conditions that Egypt has challenged during the last two years and its influences, it is crucial to re-investigate the link between financial sector and economic growth using recent data sample. This paper re-explores it using annual data for the period from 1988 to 2012. The results imply that the banking sector development has a unidirectional causal impact on economic growth. However, stock market development does not cause growth. The interpretation of such outcomes has to be taken with caution since other relevant factors are more likely to affect this link.

• Item Type: MPRA Paper
• Language: English
• Keywords: Financial Development, Economic Growth, Egypt.
• Subjects: E - Macroeconomics and Monetary Economics > E4 - Money and Interest Rates > E44 - Financial Markets and the Macroeconomy; O - Economic Development, Innovation, Technological Change, and Growth > O5 - Economywide Country Studies > O53 - Asia including Middle East

References

Akinlo, A. E. and Egbetunde, A. T. (2010) 'Financial Development and Economic Growth: The Experience of 10 Sub-Saharan African Countries Revisited', The Review of Finance and Banking, 2 (1), pp. 17-28.

Ben Naceur, S., S. Ghazouani and M. Omran (2008), 'Does stock market liberalization spur financial and economic development in the MENA region?', Journal of Comparative Economics, 36, pp. 673-693.

Ben Naceur, S., and Ghazouani, S. (2007) 'Stock Markets, Banks, and Economic Growth: Empirical Evidence from the MENA Region', Research in International Business and Finance, 21, pp. 297–315.

Billmeier, A. and Massa I. (2007)' What Drives Stock Market Development in the Middle East and Central Asia-Institutions, Remittances, or Natural Resources?', International Monetary Fund, IMF Working Paper Series No. 157, July.

Bolbol, A., Fatheldin, A., and Omran, M. (2005) 'Financial Development, Structure, and Economic Growth: The Case of Egypt, 1974-2002', Research in International Business and Finance, 19, pp.171-194.

Brasoveanul L. O., Dragota V., Catarama D., Semenescu A. (2010) 'Correlations between Capital Market Development and Economic Growth: The Case of Romania', Journal of Applied Quantitative Methods (JAQM), 3(1), pp. 46-75.

Dobronogov, A. and lqbal, F. (2005) ' Economic Growth in Egypt: Constraints and Determinants', Middle East and North Africa Working Paper Series No. 42, October.

Donwa, p. and Odia, J. (2010) 'An Empirical Analysis of the Impact of the Nigerian Capital Market on Her Socio-economic Development', J Soc Sci, 24(2), pp. 135-142.

Granger, C. W. J. (1969) 'Investigating Causal Relations by Econometric Models and Cross-spectral Methods', Econometrica, 37 (3), pp. 424-438.

Levine, R. (2004) 'Finance and Growth: Theory and Evidence', National Bureau of Economic Research (NBER), Working Paper Series No. 10766, September.

Levine, R. and Zervos, S. (1998) 'Stock Markets, Banks, and Economic Growth', The American Economic Review, 88 (3), June, pp. 537-558.

Mahdavi, S. and Sohrabian, A. (1991) 'The Link between the Rate of Growth of Stock Prices and the Rate of Growth of GNP in the United States: A Granger Causality Test', The American Economist, 35(2), pp. 41-48.

Nowbutsing, B. M. (2009) 'Stock Market Development And Economic Growth: The Case Of Mauritius', International Business & Economics Research Journal , 8 (2), pp. 77-88.

Shen, C. and Lee C. (2006) 'Same Financial Development yet Different Economic Growth: Why?, Journal of Money, Credit and Banking, 38 (7), October, pp. 1907-1944.

Zhang, K. (2003) 'Does Financial Development Promote Economic Growth in the East Asia?', China Journal of Finance, 1, pp. 1–10.