The relationship between financial development and economic growth in Malaysia / Nurlianna Roslan

• Main Author: Roslan, Nurlianna
• Format: Thesis
• Language: English
• Published: 2018
• Subjects: Economics; Economic development; Malaysia; Financial management. Business finance. Corporation finance; Stock price indexes. Stock quotations
• Online Access: https://ir.uitm.edu.my/id/eprint/59021/1/59021.pdf; https://ir.uitm.edu.my/id/eprint/59021/

2018 is a good year for Malaysian economy but what is the factor that boost the economy of Malaysia? According to the Hassan, Sanchez, & Yu, (2011) studied the relationship between financial development and economic growth in developing country by using panel data as a method and found that there is exist a positive relationship between financial development and economic grovvth. Therefore, the purpose of this study is to investigate the relationship between financial development and economic growth in Malaysia by using annual data from the World Development Indicators and International Monetary Fund (IMF) during the period of 1981 - 2016. To elaborate the results, multiple regression models are used by using E-views. The findings of this study are via measuring stock market development which are market capitalization and total value of shares traded are highly significant towards the economic growth in Malaysia while via measuring banking development only narrow money(Ml) and broad money (M3) are significant towards the economic growth in Malaysia. However, private sector credit is failed to reject the null hypothesis, hence it indicate that private sector credit is insignificant towards economic growth in Malaysia. This study can conclude that financial development has relationship towards the economic growth in Malaysia.