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Financial Development and Economic Growth:The Role of Energy Consumption

Author

Listed:
  • Abubakar Siddique, Hafiz Muhammad

    (PhD Candidate,Federal Urdu University,Islamabad, Pakistan)

  • Usman, Sadaf

    (Punjab Group of Colleges, Bhara Kahu Campus, Islamabad,Pakistan)

  • Ishaq, Junaid

    (PhD Candidate,Federal Urdu University, Islamabad, Pakistan)

Abstract

The study investigates financial development and economic growth nexus, incorporating use of energy resources for Pakistan for 1980-2016, using Johansen co-integration and granger causality approach. The results of Johansen test for co-integration show the link between financial development, energy and economic growth in the long time span. The findings of granger causation test uncovered a two-way causality between capital and economic growth. The one-way causality exists from economic growth in energy and financial development. The findings also exposed the one-way causality from capital formation and exports to use of energy. The government should take steps to make financial sectors stronger as it has a great role in increasing the growth of an economy.

Suggested Citation

  • Abubakar Siddique, Hafiz Muhammad & Usman, Sadaf & Ishaq, Junaid, 2018. "Financial Development and Economic Growth:The Role of Energy Consumption," Journal of Quantitative Methods, University of Management and Technology, Lahore, Pakistan, vol. 2(2), pages 43-55.
    • Handle: RePEc:ris:jqmumt:0015
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    Citations

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    Cited by:

    1. Qasim Saleem & Sidra Sidra & Abdur Rauf & Hafiz Muhammad Abubakar Siddique, 2020. "Impact of Terrorism on Economic Growth in South Asian Country," International Journal of Economics and Financial Issues, Econjournals, vol. 10(4), pages 185-191.
    2. Mohammad Mafizur Rahman & Xuan-Binh (Benjamin) Vu & Son Nghiem, 2022. "Economic Growth in Six ASEAN Countries: Are Energy, Human Capital and Financial Development Playing Major Roles?," Sustainability, MDPI, vol. 14(8), pages 1-17, April.
    3. Qamruzzaman, Md & Jianguo, Wei, 2020. "The asymmetric relationship between financial development, trade openness, foreign capital flows, and renewable energy consumption: Fresh evidence from panel NARDL investigation," Renewable Energy, Elsevier, vol. 159(C), pages 827-842.
    4. Amina Shahid, 2019. "Openness, Financial Development and Economic Growth in South Asia," Bulletin of Business and Economics (BBE), Research Foundation for Humanity (RFH), vol. 8(3), pages 132-139, September.
    5. Rabia Liaqat & Maimoona Waseem & Hafiz Muhammad Abubakar Siddique & Muhammad Tariq Majeed, 2021. "Health Outcomes Of Poverty: Evidence From Around The Globe," Bulletin of Business and Economics (BBE), Research Foundation for Humanity (RFH), vol. 10(3), pages 43-55.
    6. Amina Shahid & Hafiz Muhammad Abubakar Siddique & Rabia Liaqat, 2019. "Human Health and Foreign Direct Investment Nexus: Evidence from South Asia," Asian Development Policy Review, Asian Economic and Social Society, vol. 7(3), pages 209-218, September.

    More about this item

    Keywords

    Financial Development; Energy Consumption; Johansen co-integration; Pakistan;
    All these keywords.

    JEL classification:

    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies

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