The relationship between financial development and economic growth in Vietnam

Abstract

This study is devoted to investigate the relationship between financial development and economic
growth in Vietnam. The data employed in this study consist of the yearly financial development index and
GDP growth during the period from 1992 to 2020. Using a vector autoregressive (VAR) approach, the results
indicate that the financial development has the negative effect on the economic growth. However, in the
opposite direction, there is no evidence regarding the effect of economic growth on financial development
in Vietnam. In addition, results derived from the Granger causality test confirm there is the uni-directional
causality, from the financial development to the economic growth