The impact of natural resources, economic growth, savings, and current account balance on financial sector development: Theory and empirical evidence


Cetin M., SÜMERLİ SARIGÜL S., IŞIK C., Avci P., Ahmad M., Alvarado R.

RESOURCES POLICY, vol.81, 2023 (SSCI) identifier identifier

  • Publication Type: Article / Article
  • Volume: 81
  • Publication Date: 2023
  • Doi Number: 10.1016/j.resourpol.2023.103300
  • Journal Name: RESOURCES POLICY
  • Journal Indexes: Social Sciences Citation Index (SSCI), Scopus, International Bibliography of Social Sciences, Aerospace Database, Aquatic Science & Fisheries Abstracts (ASFA), Business Source Elite, Business Source Premier, Communication Abstracts, Compendex, EconLit, Index Islamicus, INSPEC, Metadex, PAIS International, Pollution Abstracts, Public Affairs Index, Civil Engineering Abstracts
  • Kayseri University Affiliated: Yes

Abstract

The development of the financial sector is one of the main macroeconomic goals for developing countries as well as developed ones. The literature focusing on the determinants of financial sector development presents very diverse and inconsistent results. Therefore, the main aim of the study is to empirically investigate the long run and causal linkages between natural resources, economic growth, savings, current account balance and financial sector development for 33 developing countries. The study applies the cross-sectionally augmented autore-gressive distributed lag (CS-ARDL) and Dumitrescu-Hurlin panel causality tests, which are among the new panel data techniques. The results reveal that natural resources, economic growth, savings, current account balance and financial sector development are cointegrated. Natural resources, economic growth and current account balance negatively affect financial development while savings stimulate financial development. It is found that there exists a bi-directional causality between all the explanatory variables and financial development. Theo-retical and policy implications are discussed within the perspective of macroeconomics and financial sustain-ability for developing countries.