International Journal of Financial Management

Open Access Open Access  Restricted Access Subscription Access
Open Access Open Access Open Access  Restricted Access Restricted Access Subscription Access

Financial Development and Economic Growth in Sudan: Empirical Assessment Based on an Application of the Autoregressive Distributed Lag (ARDL) Model


Affiliations
1 Assistant Professor, Department of Business Administration, Sur University College, Oman
     

   Subscribe/Renew Journal


This study investigates the effect of fi nancial development on economic performance in Sudan over the period (1970- 2007) by using the Autoregressive Distributed Lag (ARDL) approach to co-integration. The main empirical fi ndings indicate a weak relationship between fi nancial development and economic growth in Sudan. These fi ndings may be attributed to the ineffi cient allocation of resources by banks, along with the absence of an appropriate investment climate required to foster signifi cant private investment and promote growth in the long run, and to the poor quality of credit disbursal of the banking sector in Sudan.

Keywords

Financial Development, ARDL, ECM, Economic Growth, Sudan
Subscription Login to verify subscription
User
Notifications
Font Size

  • Bank of Sudan. (1970 -2004). Annual Reports, Different Issues, Khartoum, Sudan.

  • Chang, T., Yo, Y. & Huang, C. (2005). A Reexamination of South Korea’s Aggregate Import Demand Function: Bounds Tests Analysis. Journal of Economic Development, 30, pp. 119 - 128.

  • Demetriades, P. & Hussein, K. (1996). Does Financial Development Cause Economic Growth? Time Series Evidence from 16 Countries. Journal of Development Economics, 51, pp. 387 - 411.

  • Ergungor, O. E. (2008). Financial System Structure and Economic Growth: Structure Matters. International Review of Economics & Finance, 17(2), pp. 292 - 305.

  • Gelb, A. H. (1989). Financial Policies, Growth and Effi ciency. World Bank Working Paper, 202.

  • Goldsmith, R. W. (1969). Financial Structure and Development. New Haven: Yale University Press.

  • Gregario, J. D. & Guidotti, P. E. (1995). Financial Development and Economic Growth. World Development, 23(3), pp. 433 - 448.

  • Khan, M. A. (2003). Restructuring of Financial Sector in Pakistan. Journal of the Institute of Bankers Pakistan, 70, pp. 49 - 68.

  • King, R. G. & Levine, R. (1993). Financial and Growth: Schumpeter Might be Right. Quarterly Journal of Economics, 108, pp. 717 - 737.

  • Kireyev, A. (2001). Financial Reform in Sudan. Streamlining Bank Intermediation. IMF Working Paper No.W/OI/53.

  • King, R. G. & Levine, R. (1993). Finance and Growth: Schumpeter Might be Right. Quarterly Journal of Economics, 108, 717 - 37.

  • Levine, R. (1997). Financial Development and Economic Growth: Views and Agenda. Journal of Economic Literature, 35, pp. 688 - 726.

  • Levine, R., Loayza, N. & Beck, T. (2000). Financial Intermediation and Economic Growth: Causality and Causes. Journal of Monetary Economics, 46, pp. 31 - 77.

  • Levine, R. & Zervos, S. (1998). Stock Markets, Banks, and Economic Growth. America Economic Review, June, 88(3), pp. 537 - 58.

  • Luintel, K. B. & Khan, M. (1999). A Quantitative Reassessment of the Finance-Growth Nexus: Evidence from a Multivariate VAR. Journal of Development Economics, 60, pp. 381 - 405.

  • Mckinnon, R. I. (1973). Money and Capital in Economic Development. Washington, DC: The Brookings Institution.

  • Pesaran, M. H. & Shin, Y. (1996). Co-Integration and Speed of Convergence to Equilibrium. Journal of Econometrics, 71, pp. 117 - 43.

  • Pesaran, H. M. & Pesaran, B. (1997). Working with Microfi t 4.0: Interactive Econometric Analysis. Oxford University Press.

  • Pesaran, M. H., Shin, Y. & Smith, R. (2001). Bounds Testing Approaches to the Analysis of Level Relationships. Journal of Applied Economics, 16, 289 - 326.

  • Pesaran, M. H. & Smith, R. (1998). Structural Analysis of Co-Integration VARs. Journal of Economic Survey, 12, pp. 471 - 505.

  • Rajan, R. G. & Zingalas, L. (1996). Financial Dependence and Growth. Mimeo, University of Chicago.

  • Robinson, J. (1952). The Generalization of the General Theory. In the Rate of Interest and Other Essays. London: Macmillan.

  • Romer, P. M. (1990). Endogenous Technological Change. Journal of Political Economy, 98, pp. S71 - S102.

  • Rousseau, P. L. & Vuthipadadorn, D. (2005). Finance, Investment and Growth: Time Series Evidence from 10 Asian Economies. Journal of Macroeconomics, 27, pp. 87 - 106.

  • Schumpeter, J. (1912). The Theory of Economic Development, Leipzig: Dunker and Humblot. Translated by Redevers Opie. Cambridge, MA: Harvard .

  • Shaw, E. S. (1973). Financial Deepening in Economic Development (pp. 1934). New York: Oxford University Press.

  • Stem, N. (1989). The Economics of Eevelopment: A Survey. The Economic Journal, 100, pp. 597 - 685.

  • Vita, D. G. & Abbot, A. (2002). Are Saving and Investment Cointegrated? An ARDL Bounds Testing Approach. Economics Letters, 77, pp. 293 - 299.


Abstract Views: 344

PDF Views: 0




  • Financial Development and Economic Growth in Sudan: Empirical Assessment Based on an Application of the Autoregressive Distributed Lag (ARDL) Model

Abstract Views: 344  |  PDF Views: 0

Authors

Sufi an Eltayeb Abdel-Gadir
Assistant Professor, Department of Business Administration, Sur University College, Oman

Abstract


This study investigates the effect of fi nancial development on economic performance in Sudan over the period (1970- 2007) by using the Autoregressive Distributed Lag (ARDL) approach to co-integration. The main empirical fi ndings indicate a weak relationship between fi nancial development and economic growth in Sudan. These fi ndings may be attributed to the ineffi cient allocation of resources by banks, along with the absence of an appropriate investment climate required to foster signifi cant private investment and promote growth in the long run, and to the poor quality of credit disbursal of the banking sector in Sudan.

Keywords


Financial Development, ARDL, ECM, Economic Growth, Sudan

References