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Impact of Financial Development on Economic Growth in Iran

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  • Shahrouz Keshavarzi
  • Yusuf Akan

Abstract

Always, financial sector has a central role in development and economic growth. Hence the relationship between financial development and economic growth appears to be essential. This article examines the impact of financial development on economic growth, with consider other variables affecting the economic growth, such as ratio of commercial, domestic investment and interest rate. The time period used in this study is related to the years 1980 to 2013. It also explains their method of distribution breaks (ARDL) is used to assess relationships between variables. This study estimates a relationship between variables within a Auto regressive Distributed Lag framework over the periods. The results of this study represents a significant and positive impact of financial development on economic growth. Also domestic investment has a positive and significant impact on economic growth, and Interest rate has a significant negative impact on economic growth.

Suggested Citation

  • Shahrouz Keshavarzi & Yusuf Akan, 2014. "Impact of Financial Development on Economic Growth in Iran," International Journal of Academic Research in Business and Social Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Business and Social Sciences, vol. 4(4), pages 181-189, April.
    • Handle: RePEc:hur:ijarbs:v:4:y:2014:i:4:p:181-189
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    References listed on IDEAS

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    1. Sylviane GUILLAUMONT JEANNENEY & PING HUA & ZHICHENG LIANG, 2006. "Financial Development, Economic Efficiency, And Productivity Growth: Evidence From China," The Developing Economies, Institute of Developing Economies, vol. 44(1), pages 27-52, March.
    2. Liang, Qi & Teng, Jian-Zhou, 2006. "Financial development and economic growth: Evidence from China," China Economic Review, Elsevier, vol. 17(4), pages 395-411.
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    Cited by:

    1. Al-Abdul Razag Bashier, 2015. "Economic Growth and Financial Development in Jordan: An ARDL Bounds Testing Approach," Journal of Empirical Economics, Research Academy of Social Sciences, vol. 4(5), pages 270-284.

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