The Impact of Financing on Economic Growth in the selected MENA countries

Document Type : Research/Original/Regular Article

Authors

1 Department of Economics, University of Sistan and Baluchestan

2 University of Sistan and Baluchestan

3 Institute of Humanities and Cultural Studies

10.30507/jmsp.2020.102557

Abstract

The Impact of Financing on Economic Growth in the selected MENA countries

Abstract

Achieving a high and stable economic growth rate is one of the major goals of any economic system and is always considered by national economic policymakers. To achieve this, we need to identify binding constraints on economic growth. Because a growth strategy will succeed when the constraints on economic growth identified and some arrangements adopted to remove them. One of the most important constraint that has always been of interest to economists is financing constraint.In this study, we examined the impact of financing on enonomic growth of 15 MENA countries covering 2003 to 2016 data and using the GMM method. our empirical finding indicate that financing has a positive impact on the economic growth of MENA countries and improving this variable leads to growth and prosperity.

Keywords: Financing, Economic Growth, Growth model, MENA , Dynamic Panel Data

Keywords

Main Subjects


Aboozari, A., & Kerani, A. (2018). “Analyzing financialization in Iran’s economy”. Quarterly Journal of the Macro and Strategic Policies, 6(22), 61-80. (Persian)
Aboozari, A., Shahikitash, M., & Karani, A. (2018). “Analyzing the idea of financialization in Iran’s economy”. Quarterly Journal of the Macro and Strategic Policies, 6(22), 61-80. (Persian)
Adabi Firoozabadi, B., Gholami, A., & Salimi Soodrajani, E. (2013). The effect of finance systems in the economic development of OPEC members. The 4th Conference of Developing Finance in Iran, 4(1), 24-45. (Persian)
Falahati, A., Mehnatfar, Y., Espahan, A. (2018). “The relationship between increasing the public and private investment and economic development in Iran”. Quarterly Journal of the Macro and Strategic Policies, 6(23), 456-477. (Persian)
Khalili, M., & Salimi, R. (2014). “The relationship between direct foreign investment, and financial and economic development: The case of a selected Asian countries”. Quarterly Journal of Economic Research and Policies, 22(71), 143-156. (Persian)
Mehrara, M. & Talakesh Na’ini, H. (2009). “Analyzing the relationship between the financial development and economic development in a selected countries using dynamic mixed data”. Knowledge and Development, 16(36), 23-43. (Persian)
Mirjalili, H. (2016). Identifying the challenges of economic development. The Office of Economic Studies of Parliamentary Research, No. 14795, 3-25. (Persian)
Molayi, M. (2003). Analyzing the effective factors of benefits from small industries in Iran. PhD Dissertation of Commercial Management. Tarbiat Modares University, Tehran. (Persian)
Mozafari, Z., & Kazeroni, A. (2016). “The effect of financial structure on the instability of economic development of Iran”. The Economic Research, 18(1), 1-31. (Persian)
Nazifi, F. (2004). “Financial and economic development in Iran”. Journal of Economic Research, 14, 97,129. (Persian)
Sadrinia, M., Mirasadi, S., & Varvani, M. (2009). “Methods of financing small and average firms in different stages of life”. Journal of Technical Parks and Development Centers, 19, 13-21. (Persian)
Samimi, S., & Jalali, A. (2014). “Analyzing the obstacles of investment in private sectors in Iran: The case of macro-policies”. Quarterly Journal of the Macro and Strategic Policies, 2(10), 89-109. (Persian)
Setayesh, M., Momtazian, A., Zare, M., & Hayati, J. (2014). “Analyzing the effect of competition in the market product on the cost of financing”. Journal of Accounting Knowledge, 8(23), 7-32. (Persian)
Shabani, M. (2009). The international monetary and financial markets. Qom: Mehr. (Persian)
Soleimani, B., & Amiri, B. (2009). “Finance development and economic development: The case of developing countries”. Quantitative Economics, 6(4), 125-145. (Persian)
Taghavi, M., Amiri, H., Mohammadian, A. (2011). “Financial development of MENA countries using dynamic panel method”. Financial Knowledge of Securities Analysis, 3(10), 63-82. (Persian)
Abdelhafidh, S. (2013). "Potential Financing Sources of Investment and Economic Growth in North African Countries: A Causality analysis". Journal of Policy Modeling, 35, 150-169.
Allen, F., Ian, J., & Qian, M. (2005). "Law, finance, and economic growthin China".  Journal of Financial Economics, 77, 57-116.
Apostolakis, G., & Papadopoulos, A. (2019). “Financial stability, monetary stability and growth: A panel VAR analysis”. Open Economies Review, 30, Issue 1, 17-157.
Arrelano, M., & Bond, S. (1991). "Some tests of specification in panel data: Monte Carlo evidence and an application to employment equations". Review of Economics and Statistics, 58, 277-297.
Arrelano, M., & Bover, O. (1995). "Another look at the instrumental variables estimation of error components models". Journal of Econometrics, 68, 29-51.
Baltagi, B.H. (2008). “Econometric analysis of panel data”. Chichester: John Wiley & Sons Ltd, 23-45.
Barro, R.J. (1990). "Government spending in a simple model of endogenous growth". Political Economic, 98, 102-125.
Barro, R.J. (1996). "Democracy and growth”. Journal of Economic Growth. 1(1), 1-27. Retrieved from: https://www.nber.org/papers/w4909
Beck, T., Maimbo, S.M., Faye, I., & Triki, T. (2011). "Financing Africa: Through the Crisis and Beyond". The World Bank: Washington DC, USA, 67-91.
Bigirimana, M., & Hongyi, X. (2018). “Research on Relationship between Financial Inclusion and Economic Growth of Rwanda: Evidence from Commercial Banks with ARDL Approach". International Journal of Innovation and Economic Development, 4, issue 1, 7-18.
Chowdhury, A. (2015). "Terms of trade shocks and private savings in the develo- ping countries". J. Comp. Econ, 43, 1122-1134.
Easterly, W., & Levine, R. (2001). "What have we learned from a decade of empirical research on growth? It’s not factor accumulation: stylized facts and growth models". World Bank Econ. Rev, 15, 177-219.
Egert, B., & Jawadi, F. (2018). "The Nonlinear Relationship between Economic growth and Financial Development”. International Economics, 160, 3-13
Forslind, K. (2009). “Does development of financing affect economic growth?”. Journal of Cleaner Production, 12, 13-45.
Ghura, D., & Hadjimichael, M.) 1996(. “Growth in sub-Saharan Africa”. IMF Staff Pap, 43, 605-634.
Glaeser, E.L., La Porta, R., Lopez-de-Silanes, F., & Sheifer, A. (2004). “Do institu- tions cause growth?”. J. Econ. Growth, 9, 271-303.
Greene, W.H. (2008). “Econometric analysis-sixth edition. New Jersey”. Upper Saddle River: Pearson International, 44-67.
Hassan, M,K., Sanchez, B., & Yuc, J-S. (2011). “Financial development and eco- nomic growth: new evidence from panel data”. Q. Rev. Econ. Finance, 51, 88-104.
Hsiao, C. (2003). Analysis of panel data. 2nd ed. Cambridge University Press.
Hausmann, R., Klinger, B., & Wagne, R. (2008). “Doing Growth Diagnostics in Practice: A ‘Mindbook’”. Center for International Development at Harvard University, 177, 91-115.
Hausmann, R., Roderick, D., & Velasco, A. (2005)" .Growth Diagnostics." Retrieved from: http://www.tinyurl.com/y3y5zksu.
Lee, K., & Kim, B.Y. (2009). “Both institution and policies matter but differently for different income groups of countries: determinants of long-run economic growth revisited”. World Dev, 37, 533-549.
Menyah, K., Nazlioglu, S., & Wolde-Rufael, Y. (2014). “Financial development, trade openness and economic growth in African countries: new insights from a panel causality approach”. Econ. Model, 37, 386-394.
Mthanti, T., & Ojah, K. (2016). “Entrepreneurial orientation (EO): measurement and policy implications of entrepreneurship at the macroeconomic level”. Res. Policy, Forthcoming, 43-64.
Nyamongo, E.M., Misati, R.M., Kipyegon, L., & Ndirangu, L. (2012). “Remittances, financial development and economic growth in Africa”. J. Econ. Bus, 64, 204-260.
Kodongo, O., & Ojah, K. (2016). “Does infrastructure really explain economic growth in Sub-Saharan Africa?”. Review of Development Finance, 6, 105-125.
Redding, S., & Venables, A.J. (2004). “Economic geography and international ine- quality”. J. Int. Econ, 62, 53-82.
Roberts, J., & Fagernäs, S. (2004). “Why is Bangladesh Outper forming Kenya? A Comparative Study of Growth and Its Causes Since the 1960”. Overseas Development Institute Economics and Statistics Analysis Unit, London, Working Paper, 5, 92-114.
Rocha, R., Arvai, Z., & Farazi, S. (2011). “Financial Access and Stability A Road Map for the Middle East and North Africa”. The World Bank Report
64937, 1-90.
Sachs, J., & Malaney, P. (2002)" .The economic and social burden of malaria". Nature, 415, 680-685.
World bank (2016). "Doing Business 2016 Measuring Regulatory Quality and Efficiency". The World Bank Report, 1-219.