Cover Image

Nonlinear relationship between financial development and economic growth : evidence from post global financial crisis panel data

Existing studies find that the nonlinear relationship between financial development and economic growth is inverted U-shaped or there exist Kuznets curve, where financial development harm growth after surpassed the threshold point. The objective of this study is to re-estimate the existing relatio...

Full description

Saved in:
Bibliographic Details
Main Authors: Elya Nabila Abdul Bahri,, Abu Hassan Shaari Md Nor,, Tamat Sarmidi,, Nor Hakimah Haji Mohd Nor,
Format: Article
Language:English
Published: Penerbit Universiti Kebangsaan Malaysia 2018
Online Access:http://journalarticle.ukm.my/19621/1/jeko_521-2.pdf
http://journalarticle.ukm.my/19621/
https://www.ukm.my/jem/issue/v52i1/
Tags: Add Tag
No Tags, Be the first to tag this record!
id my-ukm.journal.19621
record_format eprints
spelling my-ukm.journal.196212022-09-08T07:29:29Z http://journalarticle.ukm.my/19621/ Nonlinear relationship between financial development and economic growth : evidence from post global financial crisis panel data Elya Nabila Abdul Bahri, Abu Hassan Shaari Md Nor, Tamat Sarmidi, Nor Hakimah Haji Mohd Nor, Existing studies find that the nonlinear relationship between financial development and economic growth is inverted U-shaped or there exist Kuznets curve, where financial development harm growth after surpassed the threshold point. The objective of this study is to re-estimate the existing relationship between financial development and economic growth for 65 developing countries for the period post 2007-2008 Global Financial Crisis starts from 2009-2015 using Generalized Method-of-Moment (GMM). Three financial development indicators namely, domestic credit to private sector (DCPS), liquid liabilities (LL) and private credit to deposit money (PCDM) are used in this study. However, our findings are contrary to the previous study. Interestingly, our result shows that the nonlinear relationship between financial development and economic growth is U-shaped for all indicators. In other words, financial development accelerated economic growth after reaching the turning point. The results of U-test of Lind and Mehlum (2010) confirms that the U-shaped relationship exist. It shows that the higher financial development enhance the performance of economic growth. Thus, our results challenge the previous findings and recommend for policy review. Penerbit Universiti Kebangsaan Malaysia 2018 Article PeerReviewed application/pdf en http://journalarticle.ukm.my/19621/1/jeko_521-2.pdf Elya Nabila Abdul Bahri, and Abu Hassan Shaari Md Nor, and Tamat Sarmidi, and Nor Hakimah Haji Mohd Nor, (2018) Nonlinear relationship between financial development and economic growth : evidence from post global financial crisis panel data. Jurnal Ekonomi Malaysia, 52 (1). pp. 15-30. ISSN 0127-1962 https://www.ukm.my/jem/issue/v52i1/
institution Universiti Kebangsaan Malaysia
building Tun Sri Lanang Library
collection Institutional Repository
continent Asia
country Malaysia
content_provider Universiti Kebangsaan Malaysia
content_source UKM Journal Article Repository
url_provider http://journalarticle.ukm.my/
language English
description Existing studies find that the nonlinear relationship between financial development and economic growth is inverted U-shaped or there exist Kuznets curve, where financial development harm growth after surpassed the threshold point. The objective of this study is to re-estimate the existing relationship between financial development and economic growth for 65 developing countries for the period post 2007-2008 Global Financial Crisis starts from 2009-2015 using Generalized Method-of-Moment (GMM). Three financial development indicators namely, domestic credit to private sector (DCPS), liquid liabilities (LL) and private credit to deposit money (PCDM) are used in this study. However, our findings are contrary to the previous study. Interestingly, our result shows that the nonlinear relationship between financial development and economic growth is U-shaped for all indicators. In other words, financial development accelerated economic growth after reaching the turning point. The results of U-test of Lind and Mehlum (2010) confirms that the U-shaped relationship exist. It shows that the higher financial development enhance the performance of economic growth. Thus, our results challenge the previous findings and recommend for policy review.
format Article
author Elya Nabila Abdul Bahri,
Abu Hassan Shaari Md Nor,
Tamat Sarmidi,
Nor Hakimah Haji Mohd Nor,
spellingShingle Elya Nabila Abdul Bahri,
Abu Hassan Shaari Md Nor,
Tamat Sarmidi,
Nor Hakimah Haji Mohd Nor,
Nonlinear relationship between financial development and economic growth : evidence from post global financial crisis panel data
author_facet Elya Nabila Abdul Bahri,
Abu Hassan Shaari Md Nor,
Tamat Sarmidi,
Nor Hakimah Haji Mohd Nor,
author_sort Elya Nabila Abdul Bahri,
title Nonlinear relationship between financial development and economic growth : evidence from post global financial crisis panel data
title_short Nonlinear relationship between financial development and economic growth : evidence from post global financial crisis panel data
title_full Nonlinear relationship between financial development and economic growth : evidence from post global financial crisis panel data
title_fullStr Nonlinear relationship between financial development and economic growth : evidence from post global financial crisis panel data
title_full_unstemmed Nonlinear relationship between financial development and economic growth : evidence from post global financial crisis panel data
title_sort nonlinear relationship between financial development and economic growth : evidence from post global financial crisis panel data
publisher Penerbit Universiti Kebangsaan Malaysia
publishDate 2018
url http://journalarticle.ukm.my/19621/1/jeko_521-2.pdf
http://journalarticle.ukm.my/19621/
https://www.ukm.my/jem/issue/v52i1/
_version_ 1744354627425402880
score 13.211869

Similar Items