Financial Liberalization and Economic Growth in the North Africa Region: Cointegration Panel Analysis by DOLS and FMOLS Models

Abstract

Abstract. This article aims at examining the impact of financial liberalization on the economic growth in the North African countries. The econometric study, which covers the period between 1995 and 2013, relies on a sample composed of four Northern African countries and referring to the database of the World Bank data (2013), Heritage Foundation (2013) and Financial Openness of (the Institute for international and development Economics, 2009). The estimate model of cointegration panel reveals that there is a long-term relationship between the variables. Moreover, the estimation of DOLS and FMOLS models shows that the latter is more adequate to explain the financial liberalization’s impact on the economic growth of the North African countries. Keywords. Financial liberalization, Economic growth, Panel cointegration, DOLS, FMOLS. JEL. F43, O16, O47.