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Banking Sector Development and Economic Growth in Palestine; 1995-2014

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  • Abugamea, Gaber

Abstract

This study uses both OLS regression estimation and Granger Causality test to investigate the relationship between the banking sector development and economic growth in Palestine over the period 1995-2014. OLS results show a significant impact of banking size with a negative sign, insignificant impact of credit lending with a marginal one for lag credit and insignificant impact of efficiency on economic growth, respectively. Granger Causality test results show one way causality running from banking size to (GDP) economic growth and from banking efficiency to (GDP) per capita economic growth one. Overall results reveals a weak nexus between banking sector development and economic growth. In specific, it recommends more improving in banking lending policy to be effective in promoting economic growth.

Suggested Citation

  • Abugamea, Gaber, 2016. "Banking Sector Development and Economic Growth in Palestine; 1995-2014," MPRA Paper 89781, University Library of Munich, Germany, revised 26 Feb 2016.
    • Handle: RePEc:pra:mprapa:89781
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    References listed on IDEAS

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    Cited by:

    1. Pankaj Tiwari, 2021. "Electronic banking adoption in Ethiopia: an empirical investigation," SN Business & Economics, Springer, vol. 1(9), pages 1-28, September.
    2. Abugamea, Gaber, 2021. "Determinants of Islamic Banking Profitability: Empirical Evidence from Palestine," MPRA Paper 107527, University Library of Munich, Germany.
    3. Antonio J. Dayag & Fernando Trinidad, 2019. "Growth of Universal Banking in the Philippines: A Correlational Study with Economic Growth," International Journal of Finance & Banking Studies, Center for the Strategic Studies in Business and Finance, vol. 8(3), pages 66-76, July.

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    More about this item

    Keywords

    Banking sector development; economic growth; OLS and Causality; Palestine;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth

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