Financial development and economic growth: Empirical evidence from the Gulf Cooperation Council countries

Abstract

This paper studies the link between financial development and economic growth in a panel of 3 Gulf Cooperation Council (GCC) countries, namely, Oman, Qatar and United Arab Emirates from 2008 to 2021. Using the Generalized Method of Moment (GMM) estimator for linear dynamic panel data models, we show a positive relation between financial development and economic growth in GCC countries. These results recommend the need to promote the financial reforms and increase the efficiency of the financial systems of these countries to stimulate savings and investment and, therefore, economic growth in the selected countries.