全部 标题 作者
关键词 摘要

OALib Journal期刊
ISSN: 2333-9721
费用：99美元
投递稿件

查看量下载量

The Impact of Financial Development on Economic Growth in Zimbabwe: Comparative Analysis of Stock Markets and Commercial Banks

DOI: 10.4236/oalib.1103808, PP. 1-27

Subject Areas: Risk Management, Economic System, Business Analysis

Keywords: Stock Market, Banks and Economic Growth

Full-Text   Cite this paper   Add to My Lib

Abstract

The purpose of this paper is to examine the relationship between financial development—bank and stock market—and economic growth in Zimbabwe. Using data during the period from 2005 to 2013, the study employed a VECM for the short run Controls variables. This offers a possibility of applying VAR in order to use integrated multivariate time series and avoid spurious regression as the interest rates appear to have long run positive impact on economic growth. This means that banking sector performs better than the stock markets if the interest rate is positively related to economic growth. The findings suggest a positive relationship between efficient stock market and economic growth both in short run and long run. Interest rates have a negative effect, while market capitalisation has a positive effect on growth. It is concluded that financial sector is important in the process of sustainable economic development in Zimbabwe.

Cite this paper

Maposa, L. and Muma, F. M. (2017). The Impact of Financial Development on Economic Growth in Zimbabwe: Comparative Analysis of Stock Markets and Commercial Banks. Open Access Library Journal, 4, e3808. doi: http://dx.doi.org/10.4236/oalib.1103808.

References

[1]  Bagehot, W. (1873) A Description of the Money Market. Henry King Publishers, London.
[2]  Hicks, J. (1969) Automatists, Hawtreyans & Keynesians. Journal of Money, Credit & Banking, 1, 307-317. https://doi.org/10.2307/1991183
[3]  Schumpeter, J.A., Theorie, W., Dunker, E. and Humblot, L. (1912) The Theory of Economic Development. Harvard University Press, Cambridge.
[4]  Stiglitz, J. (1998) The Role of the Financial System in Development. Annual Bank Conference on Development in Latin America & the Caribbean.
[5]  Oks, A. (2001) Efficiency of the Financial Intermediaries and Economic Growth in CEEC, ISSN 1406.
[6]  Frimpong, J.M. (2009) Economic Forces and the Stock Market in a Developing Economy: Cointegration Evidence from Ghana. European Journal of Economics, Finance and Administrative Sciences, 16, 1450-2275.
[7]  Robert, D.D. and Word, S. (1985) Causality Tests & Functional Sensitivity. Brooklands Incorporated, Boca Raton.
[8]  Ahmed, S. (2008) Aggregate Economic Variables and Stock Markets in India. International Research Journal of Finance and Economics, 14, 141-164.
[9]  Levine, R., Loayaza, N. and Beck, T. (2000) Financial Lntermediation & Growth: Causality and Causes. Journal of Monetary Economics, 58, 31-77. https://doi.org/10.1016/S0304-3932(00)00017-9
[10]  Impavado, G. (1998) Institutional Investors, Stock Markets & Firm’s Information Disclosure. World Bank Policy Research Paper. World Bank, Washington DC.
[11]  Impavido, G., Musalem, A.R. and Tressel, T. (2005) The Impact of Contractual Savings Institutions on Securities Markets. World Bank Policy Research Paper 2948. World Bank, Washington DC.
[12]  Torado, M.C. and Smith, S.C. (2012) Economic Development. 11th Edition, Pearson Education Limited, London.
[13]  Hu, Y.W. (2012) China’s Pension Reforms: A Precondition Analysis. Global Economic Review, 35, 413-424.
[14]  Meng, C. and Pfau, W.D. (2010) The Role of Contractual Savings in Capital Market Development. National Graduate Institute for Policy Studies, Tokyo, 10-17.
[15]  Levine, R. and Zervos, Z. (1996) Stock Market Development and Long Run Growth, The World Bank Economic Review, 10, 323-340. https://doi.org/10.1093/wber/10.2.323
[16]  Demetriades, P. and Khaled, H. (1996) Does Financial Development Cause Economic Growth? Time Series Evidence from 16 Countries. Journal of Development Economics, 51, 387-411. https://doi.org/10.1016/S0304-3878(96)00421-X
[17]  Bencivenga, V.R. and Smith, B.D. (1993) Some Consequences of Credit Rationing in an Endogenous Growth Model. Journal of Economic Dynamics & Control, 17, 97-122. https://doi.org/10.1016/S0165-1889(06)80006-0
[18]  Gurley, J.G. and Shaw, E.S. (1960) Money in Theory of Finance. Brookings, Washington DC.
[19]  Hu, Y.W. (2007) Collective Pension Funds: International Evidence and Implications for China's Enterprise Annuities Reform. OECD Working Papers on Insurance and Private Pensions, No. 9, OECD Publishing.
[20]  African Development Bank, Abidjan (Various Years) African Development Bank Reports.
[21]  Makina, D. (2010) Historical Perspective on Zimbabwe’s Economic Performance: A Tale of the Lost Five Decades. Journal of Developing Societies, 26, 99-123. https://doi.org/10.1177/0169796X1002600105
[22]  Kaseke, N. (2011) An Investigation into Toll Processing in Agro-Processing Industries in Zimbabwe. Journal of Strategic Studies, 32, 500-502.
[23]  Asaolu, T.O. and Ogunmuyiwa, M.S. (2010) An Econometric Analysis of the Impact of Macroeconomic Variables of Stock Market Movement in Nigeria, Asian. Journal of Business Management, 3, 72-78.
[24]  Organization for Economic Cooperation and Development Centre (2010, 2014 & 2015) African Economic Outlook Reports. Organization for Economic Co-Operation and Development Centre, Paris.
[25]  Paramaiah, C. and Akway, O.M. (2008) Econometric Analysis of Personal Consumption Expenditure in Ethiopia, Andhra Pradesh. The ICFAI University Press, Deh-radun.
[26]  Townsend, T.P. (2001) World Cotton Market Conditions. National Cotton Council, Memphis, 401-405.
[27]  Dickey, D. and Fuller, W. (1979) Distributions of the Estimators for Autoregressive Time Series with a Unit Root. Journal of the American Statistical Association, 75, 427-431. https://doi.org/10.1080/01621459.1979.10482531
[28]  Sargan, J.D. and Bhargava, A.S. (1983) Testing Residuals from Least Squares Regression for Being Generated by the Gaussian Random Walk. Econometrica, 51, 153-174. https://doi.org/10.2307/1912252
[29]  Phillips, P.C.B. and Perron, P. (1988) Testing for a Unit Root in Time Series Regression. Biometrika, 75, 335-346. https://doi.org/10.1093/biomet/75.2.335
[30]  Nelson, C.R. and Plosser, C.I. (1982) Trend and Random Walks in Macroeconomics Time Series. Journal of Monetary Economics, 10, 139-162. https://doi.org/10.1016/0304-3932(82)90012-5
[31]  Stock, J.H. and Watson, M.W. (2006) Introduction to Econometrics. 2nd Edition, Addison Wesley, Boston.
[32]  Maddala, G.S. (2001) Introduction to Econometrics. 3rd Edition, Wiley, New York.
[33]  Engle, R.F. and Granger, C.W.J. (1987) Cointegration and Error Correction: Representation Estimation and Testing. Econometrica, 55, 251-276. https://doi.org/10.2307/1913236
[34]  Johansen, S. (1991) Estimation and Hypothesis Testing of Cointegrating Vectors in Gaussian Vector Autoregressive Models. Econometrica, 55, 251-276
[35]  Gonzalo, J. (1994) Five Alternative Methods of Estimating Long-Run Equilibrium Relationships. Journal of Econometrics, 60, 203-233. https://doi.org/10.1016/0304-4076(94)90044-2
[36]  Enders, W. (2004) Applied Econometric Time Series. 2nd Edition, John Wiley & Sons, New York.
[37]  Enders, W. (2010) Applied Econometric Time Series. 3rd Edition, John Wiley & Sons, New York.
[38]  White, H. (1980) A Heteroskedasticity-Consistent Covariance Matrix and a Direct Test for Heteroskedasticity. Econometrica, 48, 817-838. https://doi.org/10.2307/1912934
[39]  MacKinnon, J., Alfred, G., Haug, A. and Leo, M. (1999) Numerical Distribution Functions of Likelihood Ratio Tests for Cointegration. Journal of Applied Econometrics, 14, 563-577. https://doi.org/10.1002/(SICI)1099-1255(199909/10)14:5<563:: aid-jae530="">3.0.CO;2-R
[40]  Maghayereh, A. (2003) Causalrelations among Stock Prices and Macroeconomic Variables in the Small, Open Economy of Jordan. Journal of King Abdulaziz University, 17, 3-12.
[41]  Asmy, M., Rohilina, W., Hassama, A. and Amin, M.F. (2009) Effects of Macroeconomics Variables on Stock Prices in Malaysia: An Approach of Error Correction Model. Department of Economics, International Islamic University Malaysia, Gombak.
[42]  Talla, J.T. (2013) Impact of Macroeconomic Variables on the Stock Market Prices of the Stockholm Stock Exchange (OMXS30). Master’s Thesis, Jonkoping International Business School, Jonkoping.
[43]  Pilinkus, D. and Boguslauskas, V. (2009) The Short-Run Relationship between Stock Market Prices and Macroeconomic Variables in Lithuania: An Application of the Impulse Response Function. Engineering Economics, 14, 26-33.
[44]  Mukherjee, T.K. and Atsuyuki, N. (1995) Dynamic Relations between Macroeconomic Variables and the Japanese Stock Market: An Application of a Vector Error Correction Model. Journal of Financial Research, 18, 223-237. https://doi.org/10.1111/j.1475-6803.1995.tb00563.x
[45]  Pramod, K.N. and Puja, P. (2012) The Impact of Macroeconomic Fundamentals on Stock Prices Revisited: Evidence from Indian Data. Eurasian Journal of Business and Economics, 5, 25-44.
[46]  Fama, E.F. (1981) Stock Returns, Real Activity, Inflation, and Money. The American Economic Review, 71, 545-565.
[47]  Ratanapakorn, O. and Sharma, S. (2007) Dynamic Analysis between the U.S. Stock Returns and the Macroeconomic Variables. Applied Financial Economics, 17, 369-377. https://doi.org/10.1080/09603100600638944
[48]  Brooks, C. (2002) Introductory Econometrics for Finance. Cambridge University Press, Cambridge.

Full-Text


comments powered by Disqus

Contact Us

service@oalib.com

QQ:3279437679

WhatsApp +8615387084133

WeChat 1538708413




©2008-2020 OALib, Inc | Public user content licensed CC-BY 4.0 unless otherwise specified. OALib ISSN Online: 2333-9721 OALib ISSN Print: 2333-9705