期刊名称：International Research Journal of Finance and Economics
印刷版ISSN：1450-2887
电子版ISSN：1450-2887
出版年度：2019
期号：176
页码：100-115
出版社：European Journals Inc.
摘要：Applying an alternative econometric approach, this paper evaluates the long-run causal relationship between the Quantum Index of Manufacturing (QIM) and financial development. We use monthly data of Bangladesh for the period from 2004 to 2017 and apply dynamic factor model (DFM) and vector auto-regression (VAR) based Granger causality approach. Following the results of DFM, two factors, named as ‘Stock Market’ and ‘Banking Sector’ are formed with their respective variables or indicators. Results of factors-and-VAR based Granger causality exhibit a bidirectional relationship between QIM and ‘Banking Sector’ significantly causing each other. There are strong evidences that Bangladesh government has long been employing huge policy efforts (under neoliberal structural adjustment) on fostering supply leading approach, to increase industrial production by developing its stock market. But result shows a unidirectional and demand following relationship; the stock market is being developed in response to the demand of industrial production only. Since the existing relationship does not support government’s policy, its efforts might be missing due to the market’s deregulation-led inefficient and instable deepening. So, Bangladesh government should leave the ideology of fostering supply leading approach to economic growth and adopt policy efforts to let the demand following relationship function.
关键词：Banking Sector; Stock Market; Industrial Production; Bangladesh Economy; Dynamic Factor Based Causality; Demand-following; and Supply-leading Approach
