Financial Development and Economic Growth in the GCC Countries

Download or read book Financial Development and Economic Growth in the GCC Countries written by Mona Mohammad Zaiter and published by . This book was released on 2010 with total page 178 pages. Available in PDF, EPUB and Kindle. Book excerpt: Understanding the causal relationship between financial development and economic growth is important in enhancing the economy of a nation. A panel data approach is used to provide evidence for the dynamic relationship. The paper provides empirical support that stock market development is cointegrated with economic growth in the GCC countries. Granger-causality test further reveals that stock market development Granger-causes economic growth in Bahrain, Saudi Arabia, and Kuwait countries. On the other hand, economic development promotes financial development in countries like Qatar, UAE, and Oman. Hence, this study provides empirical evidence in favor of both supply-leading and demand-leading growth hypothesis.