Banking Sector Development and Economic Growth in Palestine; 1995-2014

Abugamea, Gaber (2016): Banking Sector Development and Economic Growth in Palestine; 1995-2014. Published in: International Journal of Economics and Finance Studies , Vol. 8, No. 8(2) (2016): pp. 117-128.

Abstract

This study uses both OLS regression estimation and Granger Causality test to investigate the relationship between the banking sector development and economic growth in Palestine over the period 1995-2014. OLS results show a significant impact of banking size with a negative sign, insignificant impact of credit lending with a marginal one for lag credit and insignificant impact of efficiency on economic growth, respectively. Granger Causality test results show one way causality running from banking size to (GDP) economic growth and from banking efficiency to (GDP) per capita economic growth one. Overall results reveals a weak nexus between banking sector development and economic growth. In specific, it recommends more improving in banking lending policy to be effective in promoting economic growth.

• Item Type: MPRA Paper
• Language: English
• Keywords: Banking sector development; economic growth; OLS and Causality; Palestine
• Subjects: G - Financial Economics > G2 - Financial Institutions and Services > G21 - Banks ; Depository Institutions ; Micro Finance Institutions ; Mortgages; O - Economic Development, Innovation, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity > O43 - Institutions and Growth

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