Causal relation between economic growth and domestic credit in the economic globalization: Evidence from the Hatemi-J's test

This paper empirically examines causality relationship between economic growth and domestic credit in the economic globalization in 58 developed and developing countries over the period 1970-2010. We use the asymmetric Granger causality test that is based on modified Wald test statistics within bootstrapped critical values. We find a significant causality from domestic credit to economic growth only in seven developing countries. Furthermore, there is a unidirectional causality from economic growth to domestic credit in five developed and 10 developing economies.