Access to Finance Thresholds and the Finance-Growth Nexus

Based on Aghion et al. (2005), this article provides new insights regarding whether financial development can affect economic growth non-linearly by adopting the concept of threshold effects. The empirical approach adopted in this article allows for the finance-growth relationship to be piecewise linear with a set of indicators including access to finance acting as a regime-switching trigger. Using cross-country observations from 144 countries stretching from 1985 to 2009, strong evidence of threshold effects in finance-growth link is found. It is suggested that financial development in general, and access to finance in particular, is among the important forces contributing to crosscountry (non)-convergences in growth rates

Access to Finance Thresholds and the Finance-Growth Nexus

Based on Aghion et al. (2005), this article provides new insights regarding whether financial development can affect economic growth non-linearly by adopting the concept of threshold effects. The empirical approach adopted in this article allows for the finance-growth relationship to be piecewise linear with a set of indicators including access to finance acting as a regime-switching trigger. Using cross-country observations from 144 countries stretching from 1985 to 2009, strong evidence of threshold effects in finance-growth link is found. It is suggested that financial development in general, and access to finance in particular, is among the important forces contributing to crosscountry (non)-convergences in growth rates

Testing the evolving efficiency of Arab stock markets

Our goal is to examine whether Arab stock markets are becoming more efficient during the last decade thanks to organizational improvements and agents' learning. To achieve this goal a test of evolving weak-form efficiency using GARCH-M (1,1) approach along with state-space time-varying parameters is implemented for 11 Arab stock markets for periods ending in March 2009, rather than studying their efficiency/inefficiency at a given point of time as commonly done. All markets show high sensitivity to the past shocks and are found to be weak-form inefficient. Moreover, the efficiency does not clearly improve towards the first quarter of 2009 and negatively reacts to contemporaneous crises, except temporary sub-periods of efficiency improvement for the largest markets. This contrasts with mature markets and reveals the ineffectiveness of the reforms so far undertaken and calls to intensify efforts to expand and deepen these markets besides improving their liquidity and transparency and counteracting the shortcomings of the large individual trading by enhancing investment culture and spreading institutional trading.GARCH-M (1,1) Kalman filter Evolving Efficiency Test Arab stock markets

Gulf Cooperation Council trade integration: a new empirical examination

This paper investigates GCC countries' trade integration. The gravity equation is estimated using Panel Zero-Inflated Negative Binomial specification and COMTRADE aggregate and disaggregated flows. Results confirm GCC countries' integration deficit on exports side, while being integrated to some extent on imports side and on some particular commodities. Moreover, economic size and distance differently affect trade according to its direction and the nature of goods. Finally, two major obstacles to integration are highlighted: ?Limited trade complementarity induced by excess reliance on oil and lagged industrialisation. ?Intensive trade with industrialised and some developing countries at the expense of GCC countries.GCC; Gulf Cooperation Council; Arab States; CCASG; Persian Gulf; Arabian Peninsula; Bahrain; Kuwait; Oman; Qatar; Saudi Arabia; United Arab Emirates; intra-regional trade; gravity models; panel models; zero-inflated models; negative binomial models; COMTRADE; UN; United Nations; commodity trade statistics; statistical databases; aggregate flows; disaggregated flows; integration deficits; exports; imports; economic size; economic distance; trade complementarity; oil; lagged industrialisation; intensive trade; industrialised countries; developing countries; globalisation; global markets.