BANKING DEVELOPMENT AND NON-OIL GROWTH NEXUS: A CAUSAL ANALYSIS IN THE CASE OF KUWAIT: 1992-2012
Journal Title: European Journal of Business and Social Sciences - Year 2014, Vol 3, Issue 9
Abstract
This paper aims to investigate the type of relationship between financial development indicators and non-Oil economic growth in the case of Kuwait by using annual data 1992-2012 retrieved from international financial statistics (IFS) of the International Monetary Fund (IMF) and the world Bank development indicators (WB), This study employs the Johansen and Juselius Cointegration test and Vector Error Correction Model (VECM) to reveal the long-run and short-run causality between the financial development and non-Oil GDP growth. The results show that there is a long-run causality from all the financial development selected indicators to the non-Oil GDP, the short-run deviations are corrected to the long-run equilibrium within three quarters. In the other side, it seems that in the case of Kuwaiti economy, the impact of the non-Oil GDP on financial development is limited to run only in the short term. The impulse response function shows that through one standards deviation positive shock in Credit provided to private sector, the non-Oil GDP will increase by average one standards deviation during the 10 coming years. We recommend reviewing banks’ credit portfolio to be more oriented for private companies by decreasing the credit for the households. This study provides the policy makers in Kuwait with the appropriate evidences to design their policies in fostering the non-resources sector.
Authors and Affiliations
Belhadia Abdellah| Senior Lecturer, AACSB Mentor, ACBSP Evaluator. Modern College of Business and Science Muscat, Oman abdullah.b@mcbs.edu.om, Belboub Nawal| PhD candidate Algiers University Assistant Lecturer Cihan University, Kurdistan Region, Iraq Atamkine@yahoo.co.uk
Keywords
Related Articles
- EP ID EP10520
- DOI -
- Views 281
- Downloads 10
ENTREPRENEURSHIP AND INNOVATION: THE CASE OF COMPANIES THAT USE SOCIAL NETWORKS TO PROMOTE PRODUCTS IN BACABAL – MA
The emphasis that has been gaining in the middle entrepreneur is the social networking tool in which are used by companies to promote products or services and when well directed and managed can provide great benefits...
BUDGETING ROLE, INFRASTRUCTURAL DEVELOPMENT AND ECONOMIC GROWTH IN NIGERIA
This study examines the budgeting role, infrastructural development and economic growth vis-a-vis the political development of Nigeria with reference to Ogoja local government area of Cross River State as the case stu...
POVERTY ALLEVIATION AND THE MILLENNIUM DEVELOPMENT GOALS: THE ROLE OF OBASANJO FARMS NIGERIA
The study examines poverty alleviation and the Millennium Development Goals (MDG) within the context of private sector investment – Obasanjo Farms Nigeria (OFN). This was necessitated by the fact that private sector...
EFFECT OF INTEGRATED MARKETING COMMUNICATIONS IN DRIVING NEW PRODUCT DIFFUSION AND ADOPTION: A CASE OF HYPO BLEACH IN ABA METROPOLIS OF ABIA STATE, NIGERIA
Most firms have failed to give priority to the role of IMC in initiating and reinforcing the adoption and repeated purchase of new products. Thus, this study examined the effect of Integrated Marketing Communication (...
WORK RELATED STRESS
Stress is part of human life and every living organism undergoes series of stress as a result of daily life activity. Stress at work is one of the major psychosocial risks at work. Work related stress is a problem an...