The effect of financial development on economic growth in the MENA region

This paper provides new evidence that sheds light on the effect of financial development on economic growth in nine mena countries over the period of 1991-2009. the empirical results using the fully modified ordinary least squares (fmols) and dynamic ordinary least squares (dols) estimators reveal financial development is a statistically significant determinant of economic growth,but the impact is more apparent on stock market development than banking sector development. this finding suggests that improving the functioning of the banking sector is crucial to spur economic growth in mena countries.