The impact of financial development on growth rate in oil and non-oil developing countries
Subject Areas : Financial Knowledge of Securities Analysis
Keywords: Panel data is the main method ,
Abstract :
The oil exporting countries have experienced a relatively continuous fall in GDP per capita over the last 15 years. This is in spite of benefiting from a more than average of the rest of the world investment rate. The findings of this paper, report a lower level of financial development for the oil economies when compared with rest of the world. I will show in this paper that the higher rate of investment of the oil economies can be explained mainly by the oil reverts and surprisingly, financial development has a net lower effect on investment for these economies. The paper also shows that the weakness of financial institutions, contributes to the poor performance of economic growth of the oil economics and the weakness of financial institutions might be associated with the dominant role of government in total investment and the weakness of private sector.