FINANCIAL AND ECONOMIC INDICATORS OF ECONOMIC ADVANCEMENT: EVIDENCE FROM ASIAN COUNTRIES

This research examines the role of economic and financial indicators in boosting the economic advancement of Asian countries including; Bangladesh, Bhutan, China, Indonesia, Japan, Malaysia, Sri Lanka, and Pakistan. Economic advancement indicates economic growth and economic development of any country. Economic advancement is measured through GDP growth. To predict the economic advancement three financial indicators i.e. interest spread rate (ISR), Quasi money (QM) and foreign direct investment (FDI) and three economic indicators i.e. inflation (CPI), population growth (POP) and industry value added (INDV) were used. Secondary data were obtained from the websites of State Bank of Pakistan (SBP), World Bank, WDI and International financial statistics (IFS). Data of eight countries for a time span of 31 years from 1985 to 2015 formed it as a panel combination with 248 observations. Various tests and analysis techniques were applied to get results such as descriptive statistics, correlation analysis, and panel regression analysis. For panel regression; panel unit roots test, redundant fixed effects test & Hausman test were used and finally, fixed effects model is applied to test the hypotheses. Panel regression results showed that there is a negative and significant impact of inflation (CPI) on the economic advancement of Asian countries. While foreign direct investments (FDI) showed a positive and significant role in enhancing the economic advancement of selected Asian countries. The results also revealed that industry value added (INDV) and quasi money (QM) have negative but insignificant impact on economic advancement while population growth (POP) and interest spread rate (ISR) have positive but insignificant impact on the economic advancement of Asian countries. As a whole, both financial and economic sector indicators can be used to predict economic advancement of Asian countries. This study provides assistance to policymakers and investors for their decision making. (C) 2019 INT TRANS J ENG MANAG SCI TECH.