The Nexus between Financial Development and Human Development: The Case of Developing Countries
DOI:
https://doi.org/10.24191/jeeir.v8i2.8735Keywords:
Human Development, Financial Development, Panel Cointegration, Panel CausalityAbstract
The purpose of this study is to examine the relationship between financial development and human development from the health and welfare dimensions of developing countries. This study aims to determine whether the financial developments of the countries have an effect on the basic human development of the individuals and whether human development indicators have an impact on financial development. In this study, the relationship between financial development and human development were revealed by using data obtained from developing countries. The financial development levels of countries was measured using the financial development index. The index is calculated by using M3 / GDP, private sector loans / GDP and loans to banks from private sector / GDP ratios. The human development index is calculated by considering various health indicators and GNP per capita. The data includes annual data for the period 1970-2016. Pedroni and Kao cointegration analysis and Dumitrescu and Hurlin panel causality analysis were performed in the study. The results show that there is long-term cointegration relationship and two-way causality between financial and human development in developing countiries.
References
Akhmat, G., Zaman, K., & Shukui, T. (2014). Impact of financial development on SAARC’S human development. Quality & Quantity, 48(5), 2801-2816.
Aktaş, A. P. D. A. R., & Kaplan, F. (2013), Turizm ile Ekonomik Büyüme Arasındaki İlişki: Akdeniz Ülkeleri Üzerine Bir Panel Veri Analizi Relationship between Tourism and Economic Growth: A Panel Data Analysis on Mediterranean Countries.
Alper, A. E., & Oransay, G. (2015). Cari Açık ve Finansal Gelişmişlik İlişkisinin Panel Nedensellik Analizi Ekseninde Değerlendirilmesi. Uluslararası Ekonomi ve Yenilik Dergisi, 1(2), 73-85.
Asongu, S. (2011). Financial determinants of human development in developing countries. African Governance and Development Institute WP/11/012.
Asteriou, D., & Spanos, K. (2019). The relationship between financial development and economic growth during the recent crisis: Evidence from the EU. Finance Research Letters, 28, 238-245.
Ak, M. Z., Altintaş, N., & Şimşek, A. S. (2016). Türkiye'de Finansal Gelişme Ve Ekonomik Büyüme İlişkisinin Nedensellik Analizi. Dogus University Journal, 17(2).
Baltagi, B. H. (2005), Econometric Analysis of Panel Data, Chichester: John Wiley & Sons Ltd.
Bilas, V., Franc, S., & Bošnjak, M. (2014). Determinant factors of life expectancy at birth in the European Union countries. Collegium antropologicum, 38(1), 1-9.
Cahyaningsih, D. (2016). The Effect Of Human Development On Financial Development: Evidence From Indonesian Provinces (Doctoral dissertation, Universitas Sebelas Maret).
Çeştepe, H., & Yildirim, E. (2016). Türkiye’de finansal gelişme ve ekonomik büyüme ilişkisi. Uluslararası Yönetim İktisat ve İşletme Dergisi, 30, 12-26.
Cheshti, S. (2017), Financial development as an agent of the human development: An economic perspective and prospects of human excellence, International Journal of Advanced Research and Development, 2(4), 212-216)
Dash, S., Rath, S. S., & Pati, U. (2018). Financial Globalization and its Impact on Human Development: A Comparative Analysis of India, Singapore and Japan. Revista ESPACIOS, 39(14).
Durusu-Ciftci, D., Ispir, M. S., & Yetkiner, H. (2017). Financial development and economic growth: Some theory and more evidence. Journal of Policy Modeling, 39(2), 290-306.
Ferraz, D., Mariano, E., Rebelatto, D., & Hartmann, D. (2019). Linking Human Development and the Financial Responsibility of Regions: Combined Index proposals using methods from Data Envelopment Analysis. Available at SSRN 3401374.
Filippidis, I., & Katrakilidis, C. (2015). Finance, institutions and human development: Evidence from developing countries. Economic research-Ekonomska istraživanja, 28(1), 1018-1033.
Goldsmith, R. W. (1969) Financial Structure and Development, New Haven, CT: Yale University Press.
Gurley, J.G. & Shaw, E.S. (1960) Money in A Theory of Finance, Washington, DC: Brookings Institution.
İnançli, S., Altintaş, N., & İnal, V. (2016) Finansal Gelişme ve Ekonomik Büyüme İlişkisi: D-8 Örneği. Kastamonu Üniversitesi İktisadi ve İdari Bilimler Fakültesi Dergisi, 14(4), 36-49.
Katircioğlu, S. T., & Taşpinar, N. (2017). Testing the moderating role of financial development in an environmental Kuznets curve: Empirical evidence from Turkey. Renewable and Sustainable Energy Reviews, 68, 572-586.
Kaya, A. (2017), Finansal Piyasalardaki Gelişmelerin İnsani Gelişmişlik Üzerine Etkisi: Türkiye Örneği. Uluslararası İktisadi ve İdari İncelemeler Dergisi, (20), 169-180.
Kilic, C. & Ozcan, B. (2018). The Impact of Financial Development on Human Capital: Evidence From Emerging Market Economies. International Journal of Economics and Financial Issues, 8(1), 258.
King, R.G. & R. Levine (1993) “Finance and Growth: Schumpeter Might Be Right”, Economic Journal, 107, 771–782.
Kuloğlu, A., & Ecevit, E. The Relationship Between Health Development Index And Financial Development Index: Evidence From High-Income Countries. Ekonomi, Politika & Finans Araştırmaları Dergisi, 2(2), 83-95.
Levine, R. (1997) “Financial Development and Economic Growth: Views and Agenda”, Journal of Economic Literature, 35, 688-726.
Madhu Sehrawat A.K. Giri, (2014), "The relationship between financial development indicators and human development in India", International Journal of Social Economics, Vol. 41 Iss 12 pp. 1194 – 1208.
Monacelli, T., Iovino, L., & Pascucci, F. (2012). Financial Development and Human Development Index., https://www.semanticscholar.org/paper/Financial-Development-and-Human-Development-Index-Monacelli-Iovino/903883e1f7c472fe63737e0d98be817110e60eb4
Murinde, V. (2012). Financial development and economic growth: Global and African evidence. Journal of African economies, 21(suppl_1), i10-i56.
Ostojic, S. (2013). Financial development and human development in the European Union. The University of North Dakota.
Özcan, B., & Ari, A. (2011). Finansal Gelisme ve Ekonomik Büyüme Arasindaki Iliskinin Ampirik Bir Analizi: Türkiye Örnegi/An Empirical Analysis of Relationship between Financial Development and Economic Growth: The Turkish Case. Business and Economics Research Journal, 2(1), 121.
Ozpolat, A., & Ozsoy, F. N. (2016). The Relationship Between Financial Development And Human Development In Oecd Countires: A Panel Causality Test. Economic and Social Development: Book of Proceedings, 181.
Raichoudhury, A. (2016). Financial inclusion & human development: a cross country analysis. Asian Journal of Business Research ISSN, 6(1), 2016.
Ranis, G., Stewart, F., & Ramirez, A. (2000). Economic growth and human development. World development, 28(2), 197-219.
Rogoff, B. (2003), The Cultural Nature of Human Development, Oxford University Press, 13 Şub 2003 - 448 sayfa
Sağlam, Y. ve Sönmez, F. E. (2017), Finansal Gelişme ve Ekonomik Büyüme Arasındaki İlişki: Avrupa Geçiş Ekonomileri Örneği, Eskişehir Osmangazi Üniversitesi İktisadi ve İdari Bilimler Dergisi 12.1: 121-140.
Sarwar, S., & Akhter, A. J. (2015). Choice Between Economic Reforms And Political Reforms: An Empirical Analysis For Financial Development. Journal of Emerging Economies and Islamic Research, 3(3), 18-29.
Satrovic, E. (2017). Financial Development and Human Capital in Turkey: ARDL Approach. Cappadocia Academic Review, 1(2), 1-15.
Schumpeter, Joseph Alois (1911) The Theory of Economic Development, Massachusetts: Cambridge.
Sehrawat, M., & Giri, A. K. (2014). The relationship between financial development indicators and human development in India. International Journal of Social Economics, 41(12), 1194-1208.
Sehrawat, M., & Giri, A. K. (2014). The relationship between financial development indicators and human development in India. International Journal of Social Economics, 41(12), 1194-1208.
Şengöz, N., & Özdemir, G. (2016). Temel Bileşenler Analizi Ve K-Ortalama Kümeleme Yönteminin Birlikte Kullanımı: Bir Örnek Uygulama, Mehmet Akif Ersoy Üniversitesi Sosyal Bilimler Enstitüsü Dergisi, 8(15), 85-94.
Simplice, A. (2011). Financial determinants of human development in developing countries (No. 33949). University Library of Munich, Germany.
Stanton, E. (2007). The Human Development Index: A History. Political Economy Research Institute, University of Massachusetts at Amherst.
Stanton, E. A. (2007). The human development index: A history. PERI Working Papers, 85.
Stojkoski, V., & Popova, K. (2016). Financial Development and Growth: Panel Cointegration Evidence from South-Eastern and Central Europe. University Library of Munich, Germany.
Tabash, M. I., & Dhankar, R. S. (2014). Islamic Financial Development and Economic Growth--Empirical Evidence from United Arab Emirates. Journal of Emerging Economies & Islamic Research, 2(3).
Von Pischke, J. D. (1997). Poverty, Human Development and Financial Services (No. HDOCPA-1997-04). Human Development Report Office (HDRO), United Nations Development Programme (UNDP).
Yıldız, K., Çamurcu, Y., & Doğan, B. (2010). Veri Madenciliğinde Temel Bileşenler Analizi ve Negatifsiz Matris Çarpanlarına Ayırma Tekniklerinin Karşılaştırmalı Analizi. Akademik Bilişim.
Younsi, M., & Bechtini, M. (2018). Economic Growth, Financial Development and Income Inequality in BRICS Countries: Evidence from Panel Granger Causality Tests.
Zaman, K., Izhar, Z., Khan, M. M., & Ahmad, M. (2012). RETRACTED: The relationship between financial indicators and human development in Pakistan. Economic Modelling, 5(29), 1515-1523.
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2020 Bilgehan Tekin
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.
