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- Title
CONTROL CAUSALITY IN THE FINANCE-GROWTH NEXUS: Super-Exogeneity Test Evidence from SAARC Countries.
- Authors
KAKAR, Mehmood Khan; MAHMOOD, Tariq; SHAHAB, Sadaf
- Abstract
This study utilizes concepts of super-exogeneity and control causality to examine the causal relationship between financial deepening and economic growth. For the assessment, the purpose study has explored data from South Asian countries, namely Pakistan, India, Bangladesh and Sri Lanka, for the period 1980-2018. Results indicate that financial deepening causes economic growth and the reverse is also true in the case of Pakistan and Bangladesh. This study provides evidence of super-exogeneity in the case of India and Sri Lanka that economic growth causes financial deepening while the reverse does not hold. Overall, causal directions in the finance-growth nexus of sample countries are mixed. Results imply that sample economies should prioritize financial reform over growth to accelerate the pace of financial restructuring and sustainable growth.
- Subjects
BANGLADESH; SRI Lanka; PAKISTAN; CORPORATE reorganizations; ECONOMIC expansion; COUNTRIES
- Publication
Pakistan Journal of Applied Economics, 2022, Vol 32, Issue 2`, p205
- ISSN
0254-9204
- Publication type
Article