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Does Bank Profitability Stimulate Economic Growth in the Arab Region?

  • Omar Ghazy Aziz EMAIL logo
Published/Copyright: August 31, 2020

Abstract

This study empirically investigates the impact of bank profitability, as a complementary measure of financial development, on growth in the Arab countries between 1985 and 2016. Using a generalized method of moments (GMM) estimation to test the impact of the bank profitability on growth, this study utilises two variables in the econometric model which are return on assets and return on equity. This study reveals that both variables of bank profitability are positive and significant. This confirms that the bank profitability, beside other financial development variables, has positive impact on the growth. This study points out some important implications based on this result.

JEL classification: G01; G21; C23; C36; O16; O40

Corresponding author: Omar Ghazy Aziz, Australian National Institute of Management and Commerce (IMC), Suite 1 Biomedical Building, 1 Central Avenue, Eveleigh NSW 2015, Sydney, Australia, E-mail:

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Received: 2019-07-29
Revised: 2020-04-29
Accepted: 2020-06-29
Published Online: 2020-08-31

© 2020 Walter de Gruyter GmbH, Berlin/Boston

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