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229769

Finance-Growth Nexus in the Framework of Democratic Construction: Empirical Evidence from Egypt

Article

Last updated: 22 Jan 2023

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Abstract

relationship between financial development and economic growth. However, literature intensively explores the relationship's shape; the proponents overlook the crucial relationship validity determinants. Thus, misleading and biased estimates results are expected due to neglecting structural aspects affecting the nature of the finance-growth nexus. Therefore, considering democratic construction to the finance-growth nexus is crucial. Among others, a specific threshold regression approach has been applied to determine institutional quality's threshold level at which financial development positively impacts economic growth. The econometric analysis aimed to verify the robustness of the threshold effect and the strength of the measures. Moreover, intensive measures are applied, whereby (i) the control variables are expressed using variables that influence the finance-growth nexus. (ii) Another alternative threshold approach is applied by finding the marginal impact of financial development associated with the quality of the institutional environment. Using different threshold regression approaches shows the importance of the democratic construction threshold on the relationship between financial development and economic growth in Egypt; this gives policymakers priority to support the endeavors of democratic construction in light of their efforts to stimulate economic growth through financial development and provides a deeper insight into the nature of the relationship between financial development and economic growth

DOI

10.21608/cfdj.2022.229769

Keywords

Financial development, Economic growth, democracy, Institutions, Threshold Autoregression, Egypt

Authors

First Name

Ramy

Last Name

Elazhary

MiddleName

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Affiliation

Economics Dept, Faculty of Commerce, Zagazig University, Zagazig, Egypt

Email

ramyazhary@zu.edu.eg

City

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Orcid

0000-0002-9731-2873

Volume

3

Article Issue

2

Related Issue

32919

Issue Date

2022-07-01

Receive Date

2022-04-08

Publish Date

2022-07-01

Page Start

551

Page End

584

Print ISSN

2682-3403

Online ISSN

2682-4531

Link

https://cfdj.journals.ekb.eg/article_229769.html

Detail API

https://cfdj.journals.ekb.eg/service?article_code=229769

Order

16

Type

المقالة الأصلية

Type Code

1,242

Publication Type

Journal

Publication Title

المجلة العلمية للدراسات والبحوث المالية والتجارية

Publication Link

https://cfdj.journals.ekb.eg/

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Article

Created At

22 Jan 2023