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Published in:
2013 | OriginalPaper | Chapter
The Impact of Commercial Banking Performance on Economic Growth
Authors : Xiaofeng Hui, Suvita Jha
Published in: Proceedings of the Institute of Industrial Engineers Asian Conference 2013
Publisher: Springer Singapore
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Abstract
The financial sector and economic growth spark hot debates. This paper addresses the question of whether commercial banking performance in Nepal reasons to economic growth. In order to answer this question, the present study focuses on analyzing the relationship between deposit, loan and advances and assets as proxy for performance of commercial banks while gross domestic product proxies economic growth over the period of 1975–2010. Using Augmented Dickey Fuller and Ordinary Least Square, the regression results indicated that deposits and assets have significant impact on the economic growth of Nepal while loan and advances has insignificant impact on the economic development. Furthermore, the Granger-Causality test suggests that there was no causality with deposit, loan and advances and assets with the economic acceleration. It can be concluded that not only commercial banking performance but also other variables political stability and technology play the important role in the economic advances in Nepal.