FINANCIAL SECTOR DEVELOPMENT AND ECONOMIC GROWTH IN THE SELECTED EAST AFRICAN COMMUNITY COUNTRIES: EVIDENCE FROM PANEL UNIT ROOT AND COINTEGRATION TEST.
- Jomo Kenyatta University of Agriculture and Technology.
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This paper seeks to establish the relationship between financial sector development and economic growth in the selected East African Community Countries which include Uganda, Kenya and Rwanda using evidence from panel unit root and cointegration test basing on annual data from 2005-2015.The results from panel unit root indicate evidence of stationary variables after first difference while panel cointegration results indicate a unidirectional causality from financial sector development to economic growth in the long run which implies that financial sector development leads to economic growth in the selected East African Community Countries therefore policies aiming at developing the financial sector should be supported in order to achieve economic growth.
[Asiimwe Julian & Mbabazi Mbabazize, Okello John Paul. (2016); FINANCIAL SECTOR DEVELOPMENT AND ECONOMIC GROWTH IN THE SELECTED EAST AFRICAN COMMUNITY COUNTRIES: EVIDENCE FROM PANEL UNIT ROOT AND COINTEGRATION TEST. Int. J. of Adv. Res. 4 (Aug). 576-588] (ISSN 2320-5407). www.journalijar.com
