Open AccessThe Differential Impact of Financial Intermediation on Economic Growth in Oil-Dependent Economies
Author(s) -
Anthony Anyanwu,
Christopher Gan,
Baiding Hu
Publication year - 2018
Publication title -
review of economic analysis
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.101
H-Index - 1
ISSN - 1973-3909
DOI - 10.15353/rea.v10i3.1447
Subject(s) - cointegration , economics , monetary economics , per capita , pooled variance , real gross domestic product , intermediation , investment (military) , macroeconomics , econometrics , medicine , population , meta analysis , demography , sociology , politics , political science , law
This paper analyses the relationship between bank credit and economic growth. We extend existing literature by treating separately the oil and non-oil sectors of 28 oil-dependent economies from 1990-2012. We employ panel cointegration and pooled mean group estimation techniques which are appropriate for drawing conclusions from dynamic heterogenous panels. The results of the panel cointegration test indicate that bank credit has no significant long-run relationship with non-oil GDP per capita. The results of the pooled mean group estimator reveal no significant long-run impact of bank credit on non-oil GDP per capita. Overall results suggest that banks do not yet provide adequate credit to stimulate non-oil economic growth. The policy implication of our findings is that the financial sector should be more involved in productive investment activities to promote inclusive growth.