IMPACT OF FINANCIAL GROWTH ON THE ECONOMIC DEVELOPMENT OF OMAN

Abstract

Purpose of the study: This paper aims to empirically test the long and short-run effects of financial development on the economic growth of Oman.
 Methodology: This paper has applied the Unit root test, ARDL Bound Test for Cointegration, CUSUM, and CUSUMSQ Test for testing of hypotheses. The data used to test the relationship between financial development and economic growth covers the period from 1980 to 2017.
 Main Findings: The major finding of the study suggested that the financial development variables measured in the research influence the economic growth in Oman. 
 Applications of the Study: This study can be useful to assess the strength of the empirical link between the financial sector and economic growth in Oman as one of the oil-exporting states of the Middle East Region, where such studies are inadequate.
 The novelty of the Study: The finding of the study with an addition to the existing literature by incorporating the new variables like employment or poverty in the existing model provides new insight on the financial development of Oman.
 Limitations and forward of the Study: The study has considered a set of data which in general acts as a catalyst for economic development in a particular country. 
 Implications of the Study: The outcome of the study suits the nature of the country and its socio-economic conditions. The outcomes of the study will not be suitable for every country and may result in spurious outcomes.