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Impact of Sectorial Distribution of Commercial Banks’ Credit on Economic Growth in Sri Lanka

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dc.contributor.author Muthusamy, V.
dc.contributor.author Dewasiri, N.J.
dc.contributor.author Weerakoon, Y.K.B.
dc.contributor.author Amarasinghe, A.A.M.D.
dc.date.accessioned 2019-01-14T07:20:13Z
dc.date.available 2019-01-14T07:20:13Z
dc.date.issued 2018
dc.identifier.citation Muthusamy, V., Dewasiri, N.J., Weerakoon, Y.K.B., Amarasinghe, A.A.M.D. (2018). "Impact of Sectorial Distribution of Commercial Banks’ Credit on Economic Growth in Sri Lanka", 15th International Conference on Business Management, University of Sri Jayewardenepura, pp. 361-376 en_US
dc.identifier.uri http://dr.lib.sjp.ac.lk/handle/123456789/8249
dc.description.abstract The study attempts to investigate the impact of sectorial distribution of Commercial banks’ credit on economic growth in Sri Lanka from 2004 to 2017. The data of commercial banks’ loans and advances to the agriculture sector, industry sector, personal consumption, and service sector are used to track the sectorial credit distribution to the private sector by commercial banks. The regression analysis, Johansen-Juselius Cointegration test, Granger Causality test, Impulse Response Function (IRF) analysis and Forecast Error Variance Decompositions (FEVD) models are employed to determine the effect of sectorial distribution of Commercial banks’ credit on economic growth in Sri Lanka. The regression results indicate that the commercial bank sectorial credit have significant positive impact on the economic growth except agricultural sector. Agriculture sector has a long run negative relationship with Gross Domestic Product (GDP) while other sectors have positive long run relationship between economic growth. Granger Causality tests showed that there is a unidirectional causality from agriculture sector on GDP. IRFs and Variance decomposition analysis confirmed the statistically significant short run relationship between GDP and agriculture sector. According to the study results, the policy makers could motivate banks to distribute credit amongst the industry and service sectors since it has a positive impact on GDP in the long-run. Moreover, it is possible to use credit distribution to the agricultural sector as a short term mechanism to increase GDP. en_US
dc.language.iso en en_US
dc.publisher University of Sri Jayewardenepura en_US
dc.subject Commercial bank, Credit, Economic growth, Private Sector en_US
dc.title Impact of Sectorial Distribution of Commercial Banks’ Credit on Economic Growth in Sri Lanka en_US
dc.type Article en_US


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