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Openness, Financial Development and Economic Growth in Algeria: An ARDL Bound Testing Approach

Received: 4 December 2013     Published: 20 January 2014
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Abstract

This study examines the relationship between openness, financial development, and economic growth in Algeria using the autoregressive distributed lag (ARDL) cointegration framework. The results based on the bounds testing procedure confirm that a long-run relationship between openness, financial development, and economic growth exist. Data were obtained from the World Bank Development Indicators for the period of 1980 to 2010. Importantly, our results reveal that, openness has a significantly positive effect on economic growth. Broad money which is a proxy for financial development in this study is positive but insignificantly related to economic growth. Also, both labor force and gross capital formation are insignificant. These findings suggest a dire need for financial reforms in Algeria inorder to improve efficiency in the financial sector so as to stimulate saving/investment and thus, long-term economic growth.

Published in International Journal of Economics, Finance and Management Sciences (Volume 1, Issue 6)
DOI 10.11648/j.ijefm.20130106.28
Page(s) 400-405
Creative Commons

This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.

Copyright

Copyright © The Author(s), 2014. Published by Science Publishing Group

Keywords

Openness, Financial Development, Economic Growth, Algeria, ARDL

References
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Cite This Article
  • APA Style

    Miloud Lacheheb, Peter Adamu, Seth Akutson. (2014). Openness, Financial Development and Economic Growth in Algeria: An ARDL Bound Testing Approach. International Journal of Economics, Finance and Management Sciences, 1(6), 400-405. https://doi.org/10.11648/j.ijefm.20130106.28

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    ACS Style

    Miloud Lacheheb; Peter Adamu; Seth Akutson. Openness, Financial Development and Economic Growth in Algeria: An ARDL Bound Testing Approach. Int. J. Econ. Finance Manag. Sci. 2014, 1(6), 400-405. doi: 10.11648/j.ijefm.20130106.28

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    AMA Style

    Miloud Lacheheb, Peter Adamu, Seth Akutson. Openness, Financial Development and Economic Growth in Algeria: An ARDL Bound Testing Approach. Int J Econ Finance Manag Sci. 2014;1(6):400-405. doi: 10.11648/j.ijefm.20130106.28

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  • @article{10.11648/j.ijefm.20130106.28,
      author = {Miloud Lacheheb and Peter Adamu and Seth Akutson},
      title = {Openness, Financial Development and Economic Growth in Algeria: An ARDL Bound Testing Approach},
      journal = {International Journal of Economics, Finance and Management Sciences},
      volume = {1},
      number = {6},
      pages = {400-405},
      doi = {10.11648/j.ijefm.20130106.28},
      url = {https://doi.org/10.11648/j.ijefm.20130106.28},
      eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijefm.20130106.28},
      abstract = {This study examines the relationship between openness, financial development, and economic growth in Algeria using the autoregressive distributed lag (ARDL) cointegration framework. The results based on the bounds testing procedure confirm that a long-run relationship between openness, financial development, and economic growth exist. Data were obtained from the World Bank Development Indicators for the period of 1980 to 2010. Importantly, our results reveal that, openness has a significantly positive effect on economic growth. Broad money which is a proxy for financial development in this study is positive but insignificantly related to economic growth. Also, both labor force and gross capital formation are insignificant. These findings suggest a dire need for financial reforms in Algeria inorder to improve efficiency in the financial sector so as to stimulate saving/investment and thus, long-term economic growth.},
     year = {2014}
    }
    

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  • TY  - JOUR
    T1  - Openness, Financial Development and Economic Growth in Algeria: An ARDL Bound Testing Approach
    AU  - Miloud Lacheheb
    AU  - Peter Adamu
    AU  - Seth Akutson
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    DO  - 10.11648/j.ijefm.20130106.28
    T2  - International Journal of Economics, Finance and Management Sciences
    JF  - International Journal of Economics, Finance and Management Sciences
    JO  - International Journal of Economics, Finance and Management Sciences
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    EP  - 405
    PB  - Science Publishing Group
    SN  - 2326-9561
    UR  - https://doi.org/10.11648/j.ijefm.20130106.28
    AB  - This study examines the relationship between openness, financial development, and economic growth in Algeria using the autoregressive distributed lag (ARDL) cointegration framework. The results based on the bounds testing procedure confirm that a long-run relationship between openness, financial development, and economic growth exist. Data were obtained from the World Bank Development Indicators for the period of 1980 to 2010. Importantly, our results reveal that, openness has a significantly positive effect on economic growth. Broad money which is a proxy for financial development in this study is positive but insignificantly related to economic growth. Also, both labor force and gross capital formation are insignificant. These findings suggest a dire need for financial reforms in Algeria inorder to improve efficiency in the financial sector so as to stimulate saving/investment and thus, long-term economic growth.
    VL  - 1
    IS  - 6
    ER  - 

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Author Information
  • Department of Economics, Faculty of Economics and Management, Universiti Putra Malaysia, UPM, Serdang, Selangor, Malaysia

  • Department of Economics, Faculty of Social and Management Sciences, Kaduna State University, Tafawa Balewa Way, Kaduna, Nigeria

  • Department of Economics, Faculty of Social and Management Sciences, Kaduna State University, Tafawa Balewa Way, Kaduna, Nigeria

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