##plugins.themes.bootstrap3.article.main##

The purpose of this paper is to assess the effects of the financial development and the financial institutions quality on the economic growth for the Saudi Arabia. Using generalized Method of Moments (GMM) with a dynamic panel framework, this paper employs different measures of financial development namely the Liquid liabilities (LIQ), Private credit by deposit money banks and other financial institutions (CRE) and Central bank assets (ASS), and for financial institutions quality including socioeconomic conditions, investment profile, law and order, corruption, external conflicts and democratic accountability. For the period (1990-2017), our findings strongly support the hypothesis that financial development leads to growth in the Saudi Arabia. Moreover, empirical results support a positive and significant relationship observed between financial institutions quality and growth. The findings of this paper suggest the need to give more support to the financial development for Saudi Arabia banking that have been launched in the country since the last three decades and to improve the role played by the financial institutions to stimulate saving/investment and, consequently, long-term economic growth.

 

Downloads

Download data is not yet available.

References

  1. Albatel, A.H, (2000). “Financial Development and Economic Growth in Saudi Arabia”, Journal of Economics and Administrative Sciences, No.16, pp.162-188.
     Google Scholar
  2. Alghfais, M. (2016). “Comparative analysis: The impact of financial sector development on economic growth in the non-oil sector in Saudi Arabia”. SAMA Working Paper, WP/16/5.
     Google Scholar
  3. Al-Malkawi, H., A., Marashdeh, H., & Abdullah, N. (2012). “Financial Development and Economic Growth in the UAE: Empirical Assessment Using ARDL Approach to Co integration.” International Journal of Economics and Finance Vol. 4, No. 5; Published by Canadian Center of Science and Education.
     Google Scholar
  4. Arellano, M. & Bond, S.R. (1991). “Some test of specification for panel data: Monte Carlo evidence and application to employment equations”, Review of Economic Studies, 58, pp. 277-297.
     Google Scholar
  5. Bagehot, W, (1873). “Lombard Street”,1962 ed. (Richard D. Irwin, Homewood, IL).
     Google Scholar
  6. Barajas, A., Chami, R., & Yousefi, S.R, (2013). “The Finance and Growth Nexus Re-Examined: Do All Countries Benefit Equally? ”, IMF Working Paper, No. 13/130.
     Google Scholar
  7. Beck, T., Levine R (.2004). “Legal institutions and financial development”, NBER Working Paper, N0. 10417.
     Google Scholar
  8. BenAbdelaziz, S., & BenAbdelaziz, S. (2019). “Study the Impact of financial Development Indicatorson Growth in the Region of Middle East and North Africa”, Using Panel Data and VAR”.
     Google Scholar
  9. Blundell, R.W. & Bond, S.R. (1998). “Initial conditions and moment restrictions in dynamic panel data models”, Journal of Econometrics, 87, pp. 29-52.
     Google Scholar
  10. Cherif, M., Drege, C. (2016). “Institutional Determinants of Financial Development in MENA Countries”. In: Review of Development Economics 20 (2016), 3, S. 670-680
     Google Scholar
  11. Fahsi, Z., & Chibi, A, (2019). “Financial sector development and economic growth in Algeria : an ARDL bounds testing approach 1980-2017” . Economic Visions Review. Vol. 9, No. 1, pp.53-64.
     Google Scholar
  12. Gurley, J.G. & Shaw, E.S. (1955). “Financial aspects of economic development”. The American Economic Review, 45(4), 515-538.
     Google Scholar
  13. Guru, K. B., & Yadav, I. S, (2019). “Financial Development and Economic Growth: Panel Evidence from BRICS”, Journal of Economics, Finance & Administrative Science, Vol. 24, No. 47.pp. 113-126.
     Google Scholar
  14. Hamdi, H., Sbia, R. & Tas, B.K.O. (2014). “Financial deepening and economic growth in gulf cooperation council countries”. International Economic Journal, 28(3), 459-473.
     Google Scholar
  15. Ibrahim, M. A. (2013). “Financial development and economic growth in Saudi Arabian economy.” Applied Econometrics and International Development, 13(1), 133–144.
     Google Scholar
  16. King, R.G. & Levine, R. (1993). “Finance and growth: Schumpeter might be right”. Quarterly Journal of Economics, 108(3), 717-737.
     Google Scholar
  17. Levine, R. (1997). “ Financial development and economic growth: views and agenda”. Journal of Economic Litterature. N°.35, pp.688-726.
     Google Scholar
  18. McKinnon, R.I. (1973). “Money and capital in economic development”. Washington,DC: Brookings Institution.
     Google Scholar
  19. Patrick, H. T. (1966). “Financial development and economic growth in underdeveloped countries”. Economic Development and Cultural Change, 14, 174–189.
     Google Scholar
  20. Rehman, M. Z, (2018). “ Banking Sector Development, Stock Market Development, and Economic Growth: Evidence from Saudi Arabia”, Academy of Accounting and Financial Studies Journal, Vol.22, No.4, pp.1-15.
     Google Scholar
  21. Robinson, J. (1952), “The Generalisation of the General 'theory', in her The Rate of Interest, (London: Macmillan, 1952).
     Google Scholar
  22. Rousseau, P, L., & Wachtel, P, (2000). “Inflation, Financial Development and Growth”, SSRN: https://ssrn.com/abstract=251589 or http://dx.doi.org/10.2139/ssrn.251589
     Google Scholar
  23. Samarandi, N., Fidrmuc, J & Ghosh, S. (2014). “Financial Development and Economic Growth in an oil-rich Economy: The Case of Saudi Arabia”. Economic Modelling, Vol.43, pp.267-278.
     Google Scholar
  24. Schumpeter, J. A, (1911). “The Theory of Economic Development”, Cambridge, MA: Harvard Uniyyrsity Press.
     Google Scholar
  25. Shaw, E.S. (1973). “Financial Deepening in Economic Development”, Oxford University Press, New York, NY.
     Google Scholar
  26. Škare, M., Sinkovic, D & Porada-Rochon., M. (2019), “Financial Development and Economic Growth in Poland 1990–2018”, Technological and Economic Development of Economy, Vol.25, Issue 2. Pp.103–133.
     Google Scholar
  27. Song, F., & Thakor, A.V. (2009). “Financial System Architecture and the Co-Evolution of Banks and Capital Markets”, The Economic Journal, Vol. 120, Issue 547, pp. 1021-1055, September 2010
     Google Scholar
  28. Spellman, L. J. (1982), “The Depository Firm and Industry: Theory, History, and Regulation”, Academic Press, Inc.
     Google Scholar