Page 19 - Azerbaijan State University of Economics
P. 19

Girma, Abebe Gule: The Role of Financial Development in Post-War Economic Growth

                    When the condition of the dummy variable is absent (dummy=0), which is β1+ β2
                    (∂RGDPG/∂FD = β1+ β2).

                    When condition dummy is present such as pre-war exist (pre-war=1) the effect of one
                    unit change in FD on RGDPG is β1 + β2+ β3 (∂RGDPG/∂FD = β1 + β2+ β3).

                    There are war dummies (War = 1) the effect of one unit change in FD on RGDPG is
                    β1 + β2+ β4 (∂RGDPG/∂FD = β1 + β2+ β4).

                    There are post war dummies (post-war = 1) the effect of one unit change in FD on
                    RGDPG is β1 + β2+ β5 (∂RGDPG/∂FD = β1 + β2+ β5).

                    *We use log value for official expenditure, central government debt and gross national
                    expenditure variables.

                    Variable description, measurement, and data source

                     No   Variable Id   Variable name       Measurement                Data source
                      Dependent variable
                     1    RGDPG        Economic growth      Annual real GDP per capita   World bank
                                                            growth                     data base
                     Study variable
                     2    FD           Financial            Domestic credit provided to  World bank
                                       development          private sector %GDP        data base
                     Monetary control variables
                     3    Off exc      Official   exchange  Rate  of  Local  currency  World bank
                                       rate                 exchange by dollars        data base
                     4    Ms.          Money supply         Annual growth of the broad   World bank
                                                            money supply annual        data base
                                                            growth
                     5    LIR          Interest rate        Lending interest rate      World bank
                                                                                       data base
                     Control variables
                     6    GNEXP        Expenditure          Gross national expenditure    World bank
                                                                                       data base
                     7    C.govt debt   Debt                Central government debt    World bank
                                                                                       data base
                     8    D.Saving     Saving               Domestic saving rate       World bank
                                                                                       data base
                     9    Trade        Trade openness       Trade %GDP                 World bank
                                                                                       data base
                     10   FDI          Foreign direct       Foreign direct investment   World Bank
                                       investment           net inflows %GDP           data base.
                     11   Aid          Aid effectiveness    Net ODA received per       World bank
                                                            capita                     data base
                    Source: Authors construction based on literature review




                                                           19
   14   15   16   17   18   19   20   21   22   23   24