Munich Personal RePEc Archive

The Nexus Between Financial Development and Economic Growth in Lao PDR

Kyophilavong, Phouphet and Salah Uddin, Gazi and Shahbaz, Muhammad (2014): The Nexus Between Financial Development and Economic Growth in Lao PDR.

[img]
Preview
PDF
MPRA_paper_57308.pdf

Download (179kB) | Preview

Abstract

The relationship between financial development and economic growth is not conclusive in existing economics literature. The aim of this paper is to test two hypotheses: ‘supply-leading’ hypothesis and ‘demand-following’ hypothesis, using Laos time series data. The ARDL bounds testing approach to cointegration is used to carry out this task. Our results confirm the presence of feedback effect between both variables. Financial development promotes economic growth and in resulting, economic growth leads financial development.

UB_LMU-Logo
MPRA is a RePEc service hosted by
the Munich University Library in Germany.