A panel causality analysis of the relationship between financial development and economic growth in OECD countries

This study examines the relationship between financial development and economic growth. Thus, this aims to find empirical shreds of evidence for direction causality proxied by domestic credit private sector per capita GDP growth using panel granger test Dumitrescu-Hurlin Test. For purpose, we used a 16 OECD countries from 2008 2019 provide whether supply leading hypothesis or demand following both holds. All econometric exercises are carried out whole high-income countries, upper-middle-income country groups in sample. Due cross-sectional dependence among sample determine degree integration each variable employing second-generation unit root tests CIPS. We continue our analysis with developed Dumitrescu Hurlin (2012) variables. performed three sets analyses. In first one, include all panel. then divided into two sub-groups based on income classification level these sector. The results, including sample, indicate that holds during period. means even though contains level, still seems be pre-condition nations. also obtain same results when compelling since includes different levels degrees