How Does Financial Development Impact Economic Growth in Pakistan?: New Evidence from Threshold Modelb

• 발행기관: 한국유통과학회
• 저자명: Rameez TARIQ Muhammad Arshad KHAN Abdul RAHMAN
• 간행물 정보: 『The Journal of Asian Finance, Economics and Business(JAFEB)』Vol. 7 No.8, 161~173쪽, 전체 13쪽
• 주제분류: 경제경영 > 경제학
• 파일형태: PDF
• 발행일자: 2020.08.30

영문 초록

This study examines the nonlinear relationship between financial development and economic growth in Pakistan using the threshold regression model for the period 1980-2017. We also employed quantile regression with 0.25;0.50;and 0.75 quantiles of conditional distribution. The quantile regression is based on minimizing of sum of squared residuals. The result indicates that economic growth responds positively to financial development when the level of financial development surpasses the threshold value of 0.151. However;when financial development lies below the threshold value (that is;0.151);its impact on economic growth is negative. Thus;when financial development of Pakistan surpasses the threshold level;it contributes more towards economic growth since greater level of financial development contributes more to boosts economic growth. This finding reveals that economic growth reacts differently to financial development;and the relationship between financial development and economic growth is U-shaped in Pakistan. Among the other variables;physical capital;labor force;and government expenditure exert a positive effect on economic growth. Furthermore;inflation rate and trade openness have an insignificant impact on economic growth. The results of quantile regression also confirm the non-linear relationship between financial development and economic growth in Pakistan. The finding of this study suggests revamping of financial sector policies in Pakistan.

목차

1. Introduction

2. Literature Review

3. Model;Data;And Methodology

4. Empirical Results

5. Conclusion and Policy Implication

References

키워드

Finance-Growth Nexus Threshold Non-linearity Quantile Regression