Role of Banking Sector in the Arab Economic Development
International Journal of Business and Emerging Markets 2 (2) 2010; 180-192
Posted: 8 Dec 2012
Date Written: January 7, 2010
Abstract
This paper aims to explore the role of banking system in enhancing the economic growth in the Arab economy. The paper selected nine Arab states using the coefficient correlation between domestic credit as the main engine factor of financial sector and the GDP and capital fixed formation as measures of economic growth for the period 1975 to 2005. The study concluded that there was a significant association between domestic credit and both GDP and Fixed capital formation. However, the correction with GDP is much higher than that of capital formation in each of the selected Arab states. The study also found that there were different predicted variables found in each of the selected Arab states as the most financial measures associated to the GDP for each of the single Arab states according to the multi-regression model. These banking measures, including credit value granted to private sector, the capital of banks, total assets of banks, demand deposits and term deposits finally,
Keywords: Arab economic Development, financial sector, Banks
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