Finance-Growth Nexus in the Framework of Democratic Construction: Empirical Evidence from Egypt | ||||
| المجلة العلمية للدراسات والبحوث المالية والتجارية | ||||
| Article 16, Volume 3, Issue 2, July 2022, Page 551-584 PDF (3.21 MB) | ||||
| Document Type: المقالة الأصلية | ||||
| DOI: 10.21608/cfdj.2022.229769 | ||||
 View on SCiNiTO | ||||
| Author | ||||
Ramy Elazhary
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| Economics Dept, Faculty of Commerce, Zagazig University, Zagazig, Egypt | ||||
| 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 | ||||
| Keywords | ||||
| Financial development; Economic growth; Democracy; Institutions; Threshold Autoregression; Egypt | ||||
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