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Relation between Sectoral Distribution of Commercial Bank Credit and Economic Growth in Sri Lanka

Vidyodaya Journal of Management

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Title Relation between Sectoral Distribution of Commercial Bank Credit and Economic Growth in Sri Lanka
 
Creator Muthusamy, V.
Dewasiri, N. J.
Weerakoon, Y. K. B.
Amarasinghe, A. A. M. D.
 
Description This study investigates the impact of sectoral distribution of commercial bank credit on economic growth in Sri Lanka based on data from 2005 to 2017. The Auto-regressive Distributed Lag (ARDL) model is used to investigate short and long run impact of sectoral distribution of commercial bank credit on Gross Domestic Product (GDP). The findings of the ARDL Error Correction model indicate that the commercial bank sectoral credit distribution is significantly explaining the short run economic growth. Moreover, ARDL long run form and bounds test shows that there is a long run relation between the variables. The industrial sector has a long run positive relationship with GDP while the other sectors are insignificant in explaining long run economic growth. According to the results, the government can motivate banks to distribute credit facilities to the industry sector to boost GDP in the long-run. This is the first study that discusses the sectoral distribution of commercial bank credit on economic growth of Sri Lanka as per the best of the authors‟ knowledge. Keywords Commercial bank, Credit, Economic growth, Gross Domestic Product
 
Publisher University of Sri Jayewardenepura
 
Contributor —
 
Date 2018-12-03
 
Type info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion
Peer-reviewed Article
 
Format application/pdf
 
Identifier http://journals.sjp.ac.lk/index.php/vjm/article/view/3628
 
Source Vidyodaya Journal of Management; Vol 4, No 2 (2018)
2448-9344
 
Language eng
 
Relation http://journals.sjp.ac.lk/index.php/vjm/article/view/3628/2877
 
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