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Year 2019, Volume: 7 Issue: 2, 205 - 238, 31.12.2019
https://doi.org/10.17093/alphanumeric.640213

Abstract

References

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  • Chang, T., Simo-Kengne, B. D., & Gupta, R.:The causal relationship between imports and economic growth in the nine provinces of South Africa: evidence from panel Granger causality tests. Journal of Economic Cooperation and Development, 2013, 35(2), 71-90.
  • Christopoulos, D. K., & Tsionas, E. G.: Financial development and economic growth: evidence from panel unit root and cointegration tests. Journal of development Economics, 2004, 73(1), 55-74.
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  • Demetriades, P. O., & James, G. A.: Finance and growth in Africa: The broken link. Economics Letters, 2011, 113(3), 263-265.
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  • Dritsakis, N., Adamopoulos, A., 2004. Financial development and economic growth in Greece: an empirical investigation with granger causality analysis. Int. Econ. J. 18 (4), 547–559.
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  • Edwards, S.:Openness, productivity and growth: what do we really know?. The economic journal, 1998, 108(447), 383-398.
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  • Gerni, C., Kabadayi, B., Yurttancikmaz, Z. C., & Emsen, O. S.: The analysis of competitiveness and economic growth: A case study of transition countries. International Business Research, 2013, 6(5), 117.
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The Nexus of Economic Growth, Trade Openness and Banking Sector Depth In OIC: An Application of Panel Data Analysis

Year 2019, Volume: 7 Issue: 2, 205 - 238, 31.12.2019
https://doi.org/10.17093/alphanumeric.640213

Abstract

This article is investigated the connections between economic growth, trade openness and banking sector depth, using a panel data set including seventeen countries in the Islamic Cooperation Organization (OIC), where participation and conventional banking co-exist, for the period 1990–2016. Using a multivariate framework, It is primarily found that all the variables are not integrated of order one (I). Since the series are not stationary, cross-dependence tests and Westerlund (2007) cointegration analysis are performed to the series and it is determined that the series are cross-dependent and cointegrated. Then, the models are estimated with three estimators by writing the panel as panel ARDL model to determine the long-term and short-term relations. The results of the study indicate a general long-run equilibrium connection between economic growth, trade openness and banking sector depth as well as a short-run connection among these variables. Policy suggestions include those that will increase greater banking sector depth as well as promoted trade openness.

References

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  • Bhattacharyya, S., & Hodler, R.: Do natural resource revenues hinder financial development? The role of political institutions. World Development, 2014, 57, 101-113.
  • Blackburn, K., & Hung, V. T.: A theory of growth, financial development and trade. Economica, 1998, 65(257), 107-124.
  • Boulila, G., & Trabelsi, M.:The causality issue in the finance and growth nexus: empirical evidence from Middle East and North African countries. Review of Middle East Economics and Finance, 2004, 2(2), 123-138.
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  • Chang, T., Simo-Kengne, B. D., & Gupta, R.:The causal relationship between imports and economic growth in the nine provinces of South Africa: evidence from panel Granger causality tests. Journal of Economic Cooperation and Development, 2013, 35(2), 71-90.
  • Christopoulos, D. K., & Tsionas, E. G.: Financial development and economic growth: evidence from panel unit root and cointegration tests. Journal of development Economics, 2004, 73(1), 55-74.
  • Craigwell, R., Downes, D., Howard, M., 2001. The finance-growth nexus: a multivariate VAR analysis of a small open economy. Savings Dev. 25 (2), 209–223
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  • Dollar, D.: Outward-oriented developing economies really do grow more rapidly: evidence from 95 LDCs, 1976-1985. Economic development and cultural change, 40(3), 523-544, 1992.
  • Dornbusch, R.:Exchange rates and fiscal policy in a popular model of international trade. The American Economic Review, 1975, 65(5), 859-871.
  • Dritsakis, N., Adamopoulos, A., 2004. Financial development and economic growth in Greece: an empirical investigation with granger causality analysis. Int. Econ. J. 18 (4), 547–559.
  • Edwards, S.:Financial openness, sudden stops, and current-account reversals. American Economic Review, 2004, 94(2), 59-64.
  • Edwards, S.:Openness, productivity and growth: what do we really know?. The economic journal, 1998, 108(447), 383-398.
  • Gautam, T. K., & Paudel, K. P.:The demand for natural gas in The Northeastern United States. Energy, 2018, 158, 890-898.
  • Gerni, C., Kabadayi, B., Yurttancikmaz, Z. C., & Emsen, O. S.: The analysis of competitiveness and economic growth: A case study of transition countries. International Business Research, 2013, 6(5), 117.
  • Ghatak, S., Milner, C., & Utkulu, U.:Trade liberalisation and endogenous growth: Some evidence for Turkey. Economics of Planning, 1995, 28(2-3), 147-167.
  • Goldsmith, R.:Financial Structure and Development. New Haven, CT: Yale University Press, 1969.Greenaway, D. and D. Sapsford (1994). What does liberalisation do for exports and growth? Weltwirtschaftliches Archiv, 130, 152–74.
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  • Greenwood, J., Smith, B., 1997. Financial markets in development, and the development of financial markets. J. Econ. Dyn. Control 21 (1), 145–181.
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  • Hansson, P., & Jonung, L.:Finance and economic growth: the case of Sweden 1834–1991. Research in Economics-Ricerche Economiche, 1997, 51(3), 275-301.
  • Harrison, A.:Openness and growth:A time-series, cross-country analysis for developing countries. Journal of development Economics, 1996, 48(2), 419-447.
  • Hermes, N., & Lensink, R.:Foreign direct investment, financial development and economic growth. The Journal of Development Studies, 2003, 40(1), 142-163.
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There are 112 citations in total.

Details

Primary Language English
Subjects Operation
Journal Section Articles
Authors

İsmail Durak 0000-0002-8898-9639

Ergün Eroğlu 0000-0003-4454-6251

Publication Date December 31, 2019
Submission Date September 30, 2019
Published in Issue Year 2019 Volume: 7 Issue: 2

Cite

APA Durak, İ., & Eroğlu, E. (2019). The Nexus of Economic Growth, Trade Openness and Banking Sector Depth In OIC: An Application of Panel Data Analysis. Alphanumeric Journal, 7(2), 205-238. https://doi.org/10.17093/alphanumeric.640213

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