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Broadband penetration, financial development, and economic growth nexus: evidence from the Arab League countries

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  • Rudra P. Pradhan
  • Mak B. Arvin
  • Sahar Bahmani
  • Sara E. Bennett

Abstract

This paper examines the mutual relationship between broadband penetration, financial development, and economic growth in the 22 Arab League countries for the period between 2001 and 2013. Financial development (represented by broad money supply, claims on the private sector, domestic credit to the private sector, domestic credit provided by the banking sector, market capitalization, turnover ratio, and traded stocks) is assessed both individually, and by a composite index. Our results reveal that there is a long-run equilibrium relationship between broadband penetration, financial development, and economic growth. Additionally, we use a panel vector autoregression model to reveal the nature of Granger causality between the covariates. The most important insight of this study is the presence of bidirectional causality from economic growth to broadband penetration in the long run. In addition, we find that financial development together with broadband penetration Granger-cause economic growth in the long run.

Suggested Citation

  • Rudra P. Pradhan & Mak B. Arvin & Sahar Bahmani & Sara E. Bennett, 2017. "Broadband penetration, financial development, and economic growth nexus: evidence from the Arab League countries," Macroeconomics and Finance in Emerging Market Economies, Taylor & Francis Journals, vol. 10(2), pages 151-171, May.
    • Handle: RePEc:taf:macfem:v:10:y:2017:i:2:p:151-171
    DOI: 10.1080/17520843.2016.1250800
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    Cited by:

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    2. Nair, Mahendhiran & Pradhan, Rudra P. & Arvin, Mak B., 2020. "Endogenous dynamics between R&D, ICT and economic growth: Empirical evidence from the OECD countries," Technology in Society, Elsevier, vol. 62(C).
    3. Driouchi, Ahmed & Harkat, Tahar, 2017. "Granger Causality and the Factors underlying the Role of Younger Generations in Economic, Social and Political Changes in Arab Countries," MPRA Paper 77218, University Library of Munich, Germany.
    4. Masoud Mohammed Albiman & Hamad Omar Bakar, 2022. "The Role of Financial Inclusion on Economic Growth in Sub Saharan African (SSA) Region," Athens Journal of Business & Economics, Athens Institute for Education and Research (ATINER), vol. 8(4), pages 363-384, October.
    5. Tarna Silue, 2021. "Financial Inclusion and Economic Growth : Evidence in the Digital Environment of Developing Countries," CERDI Working papers hal-03281843, HAL.
    6. Katz, Raul & Emara, Noha, 2022. "The Economic Impact of Telecommunications in Egypt," MPRA Paper 112467, University Library of Munich, Germany.

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