An Investigation on Financial Development, Trade Openness and Economic Growth: Var Approach
Journal of Contemporary Issues in Business and Government,
2021, Volume 27, Issue 2, Pages 4289-4295
AbstractThe aim of this analysis is to examine the impact on economic growth in Bahrain from 1986 to 2018 from FDs and trade openness. To investigate the data, the Vector Autoregressive Model (VAR) and the causality of Granger have been used. The results show that all vector lives are co-integrated at 5 percent meaningful levels in the long term. In the near term, economic growth will only be influenced by financial progress. The Granger Causality (CC) Test reveals the unidirectionality of global and financial developments. In this way, policymakers should advance FD and promote more free markets, in the end the aim is to increase economic growth.
- Alkhuzaim, W. (2014). Degree of financial development and EGin Qatar: cointegration and causality analysis. International Journal of Economics and Finance, 6(6), 57-69.
- Ali, B. J., Bakar, R., & Omar, W. A. W. (2016). The Critical Success Factors of Accounting Information System (AIS) And It’s Impact on Organisational Performance of Jordanian Commercial Banks. International Journal of Economics, Commerce and Management, 4(4), 658-677.
- Ali, B. J., Hasan, H., & Oudat, M. S. (2021). Relationship Among Export, Import and Economic Growth: Using Co-Integration Analysis. Psychology and Education Journal, 58(1), 5126-5134.
- Ali, B., & Omar, W. (2016). Relationship between E-Banking Service Quality and Customer Satisfaction in Commercial Banks in Jordan. American Based Research Journal, Vol-5-Issue-12
- Altaee, H. H. A., & Al-Jafari, M. K. (2014). Financial development, trade openness and economic growth: A trilateral analysis of Bahrain. International Journal of Economics and Finance, 7(1), 241.
- Altaee, H. H. A., Saied, S., Esmaeel, E., & Adam, M. (2014). Financial Development, Trade Openness and Economic Growth: Evidence from Sultanate of Oman (1972-2012). Journal of Economics and Sustainable Development, 5(23), 64-75.
- Borlea, S. N., Mare, C., Achim, M. V., & Puscas, A. (2016). Direction of causality between financial development and economic growth. Evidence for developing countries. Studia Universitatis „Vasile Goldis” Arad–Economics Series, 26(2), 1-22.
- Chandio, A. A., Rehman, A., Jiang, Y., & Joyo, M. A. (2017). Financial development, trade openness and economic growth in Pakistan: A granger causality approach. International Journal of Advanced and Applied Sciences, 4(4), 73-80.
- Dollar, D., & Kraay, A. (2004). Trade, growth, and poverty. The Economic Journal, 114(493), F22-F49.
- Engle, R. F., & Granger, C. W. J. (1987). Co-integration and error correction: representation, estimation, and testing. Econometrica, 55, 251-276.
- Faisal, F., Tursoy, T., & Resatoglu, N. G. (2017). Is there any causality between financial development, energy consumption and economic growth in Pakistan? Evidence from ARDL bounds testing approach and vector error correction model. International Journal of Ecological Economics and Statistics™, 38(2), 33-48.
- Faisal, F., Tursoy, T., & Resatoglu, N. G. (2017). Is there any causality between financial development, energy consumption and economic growth in Pakistan? Evidence from ARDL bounds testing approach and vector error correction model. International Journal of Ecological Economics and Statistics™, 38(2), 33-48.\
- Hasan, H, Maamoor, S., & Abdullah, H. (2016). Financial development and economic growth: an empirical investigation on 4 OIC countries. International Journal of Social Science and Economic Research, 1(9), 1400-1410.
- Hasan, H, & Ali, B. J., (2019) Investigating the relationship between inflation, Trade Openness, GDP and financial development in developing country: using regression approach IOSR Journal of Economics and Finance, Volume 10, Issue 5 Ser. V , PP 44-49
- Ho, S.-Y., & Njindan Iyke, B. (2018). Short-and Long-term Impact of Trade Openness on Financial Development in Sub-Saharan Africa.
- HO, C. H., PHAM, N. N., & NGUYEN, K. T. (2021). Economic Growth, Financial Development, and Trade Openness of Leading Countries in ASEAN. The Journal of Asian Finance, Economics and Business, 8(3), 191-199.
- Huchet-Bourdon, M., Le Mouël, C. L. M., & Vijil, M. (2011). The relationship between trade openness and economic growth: some new insights on the openness measurement issue. Paper presented at the XIIIème Congrès de l'Association Européenne des Economistes Agricoles (EAAE).
- Huchet‐Bourdon, M., Le Mouël, C., & Vijil, M. (2018). The relationship between trade openness and economic growth: Some new insights on the openness measurement issue. The World Economy, 41(1), 59-76.
- Hye, Q. M. A., & Lau, W.-Y. (2015). Trade openness and economic growth: empirical evidence from India. Journal of Business Economics and Management, 16(1), 188-205.
- Idris, J., Yusop, Z., & Habibullah, M. S. (2016). Trade openness and economic growth: a causality test in panel perspective. International Journal of Business & Society, 17(2). 281-290.
- Ighodaro, C. A. (2010). Co-Integration and causality relationship between energy Consumption and economic growth: further empirical evidence for Nigeria. Journal of Business Economics and Management, 11(1), 97-111.
- Keho, Y. (2017). The impact of trade openness on economic growth: The case of Cote d’Ivoire. Cogent Economics & Finance, 5(1), 1332820.
- Loayza, N., Fajnzylber, P., & Calderón, C. (2005). Economic growth in Latin America and the Caribbean: stylized facts, explanations, and forecasts: The World Bank.
- Luo, R. (2011). Shanghai as an International Financial Center-Aspiration, Reality and Implication. Undergraduate Economic Review, 8(1), 14.
- Musamali, A. R., Nyamongo, M. E., & Moyi, D. E. (2014). The relationship between financial development and economic growth in Africa. Research in Applied Economics, 6(2), 190-208.
- Nyasha, S., Gwenhure, Y., & Odhiambo, N. (2017). The dynamic causal linkage between financial development and economic growth: empirical evidence from Ethiopia. Economia Internazionale/International Economics, 70(1), 73-102.
- Oudat, M. S., & Ali, B. J. (2021). The Underlying Effect of Risk Management On Banks' Financial Performance: An Analytical Study On Commercial and Investment Banking in Bahrain. Elementary Education Online, 20(5), 404-414.
- Pedroni, P. (2004). Panel cointegration: asymptotic and finite sample properties of pooled time series tests with an application to the PPP hypothesis. Econometric Theory, 20, 597-625.
- Rahman, M. M., Shahbaz, M., & Farooq, A. (2015). Financial development, international trade, and economic growth in Australia: new evidence from multivariate framework analysis. Journal of Asia-Pacific Business, 16(1), 21-43.
- Rehman, Z. M., Ali, N., & Nasir, M. N. (2015). Financial development, savings and economic growth: evidence from Bahrain using VAR. International Journal of Financial Research, 6(2), 112-123.
- Roquez‐Diaz, A., & Escot, L. (2018). Relationship between trade openness and economic growth in Latin America: a causality analysis with heterogeneous panel data. Review of Development Economics, 22(2), 658-684.
- Saidi, K., & Mbarek, M. B. (2017). The impact of income, trade, urbanization, and financial development on CO 2 emissions in 19 emerging economies. Environmental Science and Pollution Research, 24(14), 12748-12757.
- Satyanarayana Murthy, D., Kumar Patra, S., & Samantaraya, A. (2014). Trade openness, financial development index and economic growth: Evidence from India (1971-2012). Journal of Financial Economic Policy, 6(4), 362-375.
- Trung, V. T., & Vinh, N. T. T. (2011). The Impact of Oil Prices, Real Effective Exchange Rate and Inflation on Economic activity: Novel Evidence for Vietnam. Discussion Paper Series, RIEB Kobe University.
- Yong, C., & Lee Nah, Q. (2010). Financial Growth in Singapore. Applied Economics Research Series, 1, 155-182.
- Article View: 104
- PDF Download: 94