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Ulaştırma ve Lojistik Kongreleri

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The Journal of Operations Research, Statistics, Econometrics and Management Information Systems

The Nexus of Economic Growth, Trade Openness and Banking Sector Depth In OIC: An Application of Panel Data Analysis

İsmail Durak, Ph.D.

Ergün Eroğlu, Ph.D.


This article is investigated the connections between economic growth, trade openness and banking sector depth, using a panel data set including seventeen countries in the Islamic Cooperation Organization (OIC), where participation and conventional banking co-exist, for the period 1990–2016. Using a multivariate framework, it is primarily found that all the variables are not integrated of order one (I). Since the series are not stationary, cross-dependence tests and Westerlund (2007) cointegration analysis are performed to the series and it is determined that the series are cross-dependent and cointegrated. Then, the models are estimated with three estimators by writing the panel as panel ARDL model to determine the long-term and short-term relations. The results of the study indicate a general long-run equilibrium connection between economic growth, trade openness and banking sector depth as well as a short-run connection among these variables. Policy suggestions include those that will increase greater banking sector depth as well as promoted trade openness.

Keywords: Banking Sector Depth, Economic Growth, Panel Data Analysis, Participation Banking, Trade Openness

Jel Classification: C23, F43

Suggested citation

Durak, İ., Eroğlu, E. (2019). The Nexus of Economic Growth, Trade Openness and Banking Sector Depth In OIC: An Application of Panel Data Analysis. Alphanumeric Journal, 7(2), 205-238. http://dx.doi.org/10.17093/alphanumeric.640213


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Volume 7, Issue 2, 2019


alphanumeric journal

Volume 7, Issue 2, 2019

Pages 205-238

Received: Sept. 30, 2019

Accepted: Dec. 30, 2019

Published: Dec. 31, 2019

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