مجلة البشائر الاقتصادية
Volume 11, Numéro 1, Pages 460-475
2025-04-27
Financial Development In Arab Countries: Does Access, Depth And Efficiency Contribute To Driving Economic Growth?
Authors : Mennad Boulenouar Ilias Zakaria . Meskini Anes .
Abstract
This study examines the impact of financial development indicators (access, depth, and efficiency) on economic growth (GDP) in 11 Arab countries from 1990 to 2021 using the PANEL ARDL model. The results show that financial sector development influences economic growth to varying extents. The Financial Access Index (FIA) demonstrated a positive effect both in the short and long term, emphasizing the importance of improving financial infrastructure. On the other hand, the Financial Depth Index (FID) indicated a negative impact due to rapid, unregulated financial expansion. The Financial Efficiency Index (FIE) showed no statistically significant effects, reflecting inefficiency in the financial sector. The findings also revealed notable differences between countries in their economic growth responses to financial developments, with some nations showing strong positive effects, while others displayed weak or insignificant impacts. The study recommends implementing comprehensive regulatory reforms, strengthening financial governance, and expanding financial inclusion to support sustainable economic growth.
Keywords
Financial Development ; Economic Growth ; Financial Institutions ; Panel ARDL ; Arab Countries
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