Nexus between Financial Development, Trade Openness, and Economic Growth: the Case of Malaysia
This study aims to examine the long-run equilibrium and short-run relationships between financial development, trade openness, and economic growth in Malaysia by using a sample for the period 1982-2014. The ARDL bounds test for cointegration approach and Granger causality test were applied to invest...
| Main Authors: | , , |
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| Format: | Article |
| Language: | English |
| Published: |
Romanian National Institute of Statistics
2019-03-01
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| Series: | Revista Română de Statistică |
| Subjects: | |
| Online Access: | http://www.revistadestatistica.ro/wp-content/uploads/2019/03/RRS-1_2019_2.pdf |
| Summary: | This study aims to examine the long-run equilibrium and short-run relationships between financial development, trade openness, and economic growth in Malaysia by using a sample for the period 1982-2014. The ARDL bounds test for cointegration approach and Granger causality test were applied to investigate the relationship. In order to test the stationarity of the series, ADF and PP tests were applied, and both of them revealed that all the series are stationary at first differences. The ARDL confirmed a long-run and short-run relationship between variables.
Finally, Granger causality test revealed that there is no evidence that supports finance-led growth hypothesis, however, it revealed that financial development indirectly effect on growth process through trade openness channel. |
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| ISSN: | 1018-046X 1844-7694 |