The Impact of Banks and Stock Market Development on Economic Growth in South Africa: an ARDL-bounds Testing Approach
This paper examines the impact of both bank- and market-based financial development on economic growth in South Africa during the period from 1980 to 2012. Unlike some previous studies, the current study employs means-removed average to construct both bank- and market-based financial development ind...
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| Format: | Article |
| Language: | English |
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VIZJA University
2015-04-01
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| Series: | Contemporary Economics |
| Online Access: | http://ce.vizja.pl/en/download-pdf/id/389 |
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| _version_ | 1850238198350872576 |
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| author | Sheilla Nyasha Nicholas M. Odhiambo |
| author_facet | Sheilla Nyasha Nicholas M. Odhiambo |
| author_sort | Sheilla Nyasha |
| collection | DOAJ |
| description | This paper examines the impact of both bank- and market-based financial development on economic growth in South Africa during the period from 1980 to 2012. Unlike some previous studies, the current study employs means-removed average to construct both bank- and market-based financial development indices. The study uses the newly developed autoregressive distributed lag (ARDL) bounds testing approach to examine this linkage. The empirical results of this study show that there is a positive relationship between bank-based financial development and economic growth in South Africa. The results, however, fail to find any relationship between market-based financial development and economic growth in South Africa. The results apply irrespective of whether the regression analysis is conducted in the short run or in the long run. These results imply that it is bank-based financial development rather than market-based financial development that plays a pivotal role in propelling South Africa’s real sector. |
| format | Article |
| id | doaj-art-275b7cb5a8ac43dd9ce3e1c54a9a9d22 |
| institution | OA Journals |
| issn | 2084-0845 |
| language | English |
| publishDate | 2015-04-01 |
| publisher | VIZJA University |
| record_format | Article |
| series | Contemporary Economics |
| spelling | doaj-art-275b7cb5a8ac43dd9ce3e1c54a9a9d222025-08-20T02:01:30ZengVIZJA UniversityContemporary Economics2084-08452015-04-0191110810.5709/ce.1897-9254.161389The Impact of Banks and Stock Market Development on Economic Growth in South Africa: an ARDL-bounds Testing ApproachSheilla Nyasha0Nicholas M. Odhiambo1--This paper examines the impact of both bank- and market-based financial development on economic growth in South Africa during the period from 1980 to 2012. Unlike some previous studies, the current study employs means-removed average to construct both bank- and market-based financial development indices. The study uses the newly developed autoregressive distributed lag (ARDL) bounds testing approach to examine this linkage. The empirical results of this study show that there is a positive relationship between bank-based financial development and economic growth in South Africa. The results, however, fail to find any relationship between market-based financial development and economic growth in South Africa. The results apply irrespective of whether the regression analysis is conducted in the short run or in the long run. These results imply that it is bank-based financial development rather than market-based financial development that plays a pivotal role in propelling South Africa’s real sector.http://ce.vizja.pl/en/download-pdf/id/389 |
| spellingShingle | Sheilla Nyasha Nicholas M. Odhiambo The Impact of Banks and Stock Market Development on Economic Growth in South Africa: an ARDL-bounds Testing Approach Contemporary Economics |
| title | The Impact of Banks and Stock Market Development on Economic Growth in South Africa: an ARDL-bounds Testing Approach |
| title_full | The Impact of Banks and Stock Market Development on Economic Growth in South Africa: an ARDL-bounds Testing Approach |
| title_fullStr | The Impact of Banks and Stock Market Development on Economic Growth in South Africa: an ARDL-bounds Testing Approach |
| title_full_unstemmed | The Impact of Banks and Stock Market Development on Economic Growth in South Africa: an ARDL-bounds Testing Approach |
| title_short | The Impact of Banks and Stock Market Development on Economic Growth in South Africa: an ARDL-bounds Testing Approach |
| title_sort | impact of banks and stock market development on economic growth in south africa an ardl bounds testing approach |
| url | http://ce.vizja.pl/en/download-pdf/id/389 |
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