Banking Sector Contribution

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Abstract:
The explored of the study is to determine contribution of banking sector in economic growth of 15 banks over a period from 2009 to 2010. The regression model, correlation analysis and descriptive statistic techniques were used. The co-relation results show that significant and positive relation between advances and deposits. The relationship of gross domestic product, investment, return on asset and advances have insignificant and negative. Furthermore return on asset and return on equity have insignificant and positive relationship. Regression result shows that deposit, investment and return on asset have positive and significant impact on gross domestic product. Interest and advances have negative and insignificant impact on
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So, being an important factor it is previously being studied frequently by various researchers. Fadare (2004) empirically found the effect of banking industry reforms on economic development in Nigeria by using the data 1999 - 2009. Variables used in his research were mainly interest rate margins, market premiums and total credit of banking sector. The results specify the significant negative correlation among them. In past few decades researchers found a negative influence on the economic growth due to improvements in determinants of financial performance. Other researchers found bad or even no relationship in comparison with different types of financial institutions. According to my knowledge there is a lot of data available on the related topic all around the world but specifically with reference to Pakistani context, I couldn’t find a study specifically in relation with banking performance determinants of Pakistan. There is a need of more research in this aspect of work to explore the influence of profitability, deposit, investments, advances and interest earning (Dr.…show more content…
He used dynamic panel model for this study. In the result if there is under develop financial system then its contribution is limited in economy growth. There is more efficient banking sector then it will increase economy growth.
Din and khawaja (1995) explained the study scope of interest of the banking industry in Pakistan. In this study, data collected was used for cross section model. The finding showed no proof of interest spread which influences the working factors of banking industry.
Al- Laham, et al. (2009) examined the progress of electronic money and its effect on the central bank and monetary policy for the period 1998 to 2004. In this paper analytical method was used to analyze the effect on electronic money in diverse areas. The finding showed that electronic money and good banking network help the transfer of money from one place to another. Furthermore, electronic banking progresses apply for monitory policy and effectiveness

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