The Role of Banking Sector in Capital Accumulation and Economic Growth of Ethiopia: An ARDL Approach
| dc.contributor.advisor | Advisor: Alemu. L (PhD) | |
| dc.contributor.author | Bonche Bolla | |
| dc.date.accessioned | 2025-03-17T07:44:42Z | |
| dc.date.available | 2025-03-17T07:44:42Z | |
| dc.date.issued | 2024-06-02 | |
| dc.description.abstract | This study uses the financial sector development indicator variables of deposit, loan, asset, and profit as explanatory factors and RGDP as a dependent variable to examine the empirical relationship between the banking industry and Ethiopia's economic growth. Using time series data covering the years 1980–2022, the paper empirically evaluates the contribution of the banking industry to capital accumulation and economic growth in Ethiopia. Unit root examinations, cointegration tests utilizing the ARDL approach, Granger non-causality tests, and VECM dynamics investigations of the short- and long-term dynamics are all included in the model estimate process. The analysis's result demonstrates that, although credit only has a substantial impact on short-term capital accumulation, deposits have a significantly favorable short-term impact on both economic growth and capital accumulation. However, aside from deposits, a well-designed quantitative technique has the advantage of making findings reliable and lessening the impact of researcher and subject biases, especially when the research purpose is to analyse the problems and function of the banking sector in capital accumulation and economic progress. There is unidirectional linkage that exists between credit and economic growth, although there is a reciprocal causal connection between deposits and economic expansion, according to the analysis done to ascertain the cause and effect direction. Thus, the study recommends policymakers to strengthen the sector's capacity in a manner that would effectively distribute funds to the economy's most productive sector and mobilize larger savings in order to achieve rapid capital accumulation and sustainable economic growth. In the short run, gross national saving makes a substantial and positive contribution to capital accumulation and economic growth; however, over time, this contribution diminishes and becomes less significant. On the other hand, government expenditure has a significant long- and short-term influence on capital formation; nevertheless, it has a negligibly favorable long-term impact on economic growth and a substantially negative short-term impact. | |
| dc.identifier.uri | https://etd.aau.edu.et/handle/123456789/5082 | |
| dc.language.iso | en | |
| dc.publisher | A.A.U | |
| dc.title | The Role of Banking Sector in Capital Accumulation and Economic Growth of Ethiopia: An ARDL Approach | |
| dc.type | Thesis |