Financial development and economic growth: the role of stock market and banking sector / Muhammad Zamri Pareo

The purpose of this study is to investigate the link between ASEAN's financial development and its economic growth. There are many impact that influence the economic development on this research such as liquidity level of stock market, banking performance and government intervention or monetary policy. The stock market's growing global effect has sparked a new line of inquiry into the relationship between financial development and economic growth, with a focus on the impact of stock market development on the banking sector. As a consequence, it can have various fundamental consequences. It is therefore very necessary for any economy to determine the reasons for these ties of financial growth. The previous study on this research case study produce a different or mixed result. This study was supposed to build on previous findings and evidence by using the most up-to-date data and providing more information on free relationship between financial development and economic growth. This look at uses stock market turnover ratio and stock market size as proxies for liquidity stage of stock market, non-performing loan as a proxy for banking sector overall performance, and discount rate as a proxy for authorities intervention or financial coverage GDP. A multiple regression model was employed to investigate the relationship between the dependent and independent variables in this study. Five country which is selected around ASEAN as the sample of this study over a 10 years. The study's expected findings demonstrated that financial development has a major positive or negative impact on ASEAN's economic growth. In fact, the result of this finding may be very beneficial to the government as they will handle the risk of financial and economic risks supported what is going on within the past of ASEAN.