1Doctoral Student, School of Business, Shri Mata Vaishno Devi University, Katra, Jammu & Kashmir (India), E-mail: shravanisharma06@gmail.com
2Assistant Professor, School of Business, Faculty of Management, Shri Mata Vaishno Devi University, Katra, Jammu & Kashmir (India) E-mail: suparn329@yahoo.co.in
JEL codes: G21, C23, 040
The paper measures the extent and direction of the nexus between financial development and economic growth by utilizing annual macroeconomic panel data for a sample of 23 Indian states. The study focuses on the causal link between the selectedfinancial development indicators and economic growth. The result of the panel cointegration analysis confirms the existence of short-run cointegration relationship between the selected variables. The theoretical significance of the findings of the study is noteworthy as it has attempted to broaden the scope ofgrowthfinance link by enhancing the power and accuracy ofinference and estimation using recently developed methodology combined with more expanded panel datasets to develop policy implications.
Financial Development, Causality, Panel Unit Root, Panel Cointegration, Economic Growth
