Financial development and economic growth: evidence from panel unit root and cointegration tests
نویسندگان
چکیده
In this paper we investigate the long run relationship between financial depth and economic growth, trying to utilize the data in the most efficient manner via panel unit root tests and panel cointegration analysis. In addition, we use threshold cointegration tests, and dynamic panel data estimation for a panel-based vector error correction model. The long run relationship is estimated using fully modified OLS. For 10 developing countries, the empirical results provide clear support for the hypothesis that there is a single equilibrium relation between financial depth, growth and ancillary variables, and that the only cointegrating relation implies unidirectional causality from financial depth to growth. D 2003 Elsevier B.V. All rights reserved. JEL classification: C23; O16; O40; G28
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