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Cited by 29Monetary Policy and Economic ImpactIncome, Poverty, and InequalityEconomic Growth and Development

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The nexus between financial development and poverty reduction in Egypt

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Kheir, Vivian Bushra·2018·Review of Economics and Political Science
DOI 10.1108/reps-07-2018-003
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Abstract

Purpose: The purpose of this study is to empirically examine the impact of financial development on poverty reduction in Egypt. The paper also investigates whether financial development affects poverty via gross domestic product (GDP) growth. Design/methodology/approach: This study uses the autoregressive distributed lag approach to estimate two specifications. The first is dependent on poverty by the ratio domestic credit to the private sector (percentage of GDP) and the second is dependent on the poverty by the ratio liquid liabilities to GDP or M3/GDP. The data are annual and cover the period from 1980 to 2015. Findings: In long run, the study finds that relationship between economic growth and poverty is bidirectional. Financial development and poverty (household final consumption expenditure per capita) are complementary as bidirectional (in Granger sense). In short run, the study finds the bidirectional causality between financial development (real domestic credit to private sector per capita) and poverty reduction. Practical implications: The findings suggest that governments should remove policies that impede the ability of banks to offer loan products or undermine the commercial incentive structure for banks or borrowers. It is crucial to enhance the role of specialized state-owned banks in financial intermediation. Social implications: Several attempts have been made to investigate the relationship between financial development and other macroeconomic variables, but few studies have examined the impact of financial development on poverty reduction. Furthermore, the majority of the previous studies are based on Asia and Latin America – affording Egypt very little or no coverage at all.

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Metadata

Authors
Kheir, V. B.
Corresponding author
Kheir, Vivian Bushra
Venue
Review of Economics and Political Science
Publisher
Emerald
Published
2018-07-31
Volume
3
Issue
2
Pages
40-55
ISSN
  • 0387-3285 (ISSN-L)
  • 2631-3561
DOI
10.1108/reps-07-2018-003
OpenAlex
W2891373164
Cited by
29
References
2
Citations by year
2026: 2 · 2025: 2 · 2024: 6 · 2023: 7 · 2022: 4 · 2021: 7 · 2019: 1
FWCI
3.85
Type
journal article
Language
en
Open access
Licence
Locations
  • Seikei ronsō/Review of economics and political science (publishedVersion, cc-by)
  • SSRN Electronic Journal (submittedVersion)
  • RePEc: Research Papers in Economics (submittedVersion)
  • DOAJ (DOAJ: Directory of Open Access Journals) (submittedVersion, cc-by-sa)
  • Econstor (Econstor) (submittedVersion, cc-by)
Topics
  • Social Sciences › Economics, Econometrics and Finance › General Economics, Econometrics and Finance › Monetary Policy and Economic Impact
  • Social Sciences › Sociology and Political Science › Income, Poverty, and Inequality
  • Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Economic Growth and Development
Keywords
financial development, poverty reduction, domestic credit to private sector, M3 money supply, GDP growth, bidirectional causality, household expenditure, state-owned banks, financial intermediation, Egypt

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