Banking Performance and Economic Growth in Qatar: An Empirical Investigation

Abstract

The main objective of this study is to examine empirically the relationship between commercial banking performance and economic growth in Qatar. This study aims at examining functional relationships between bank's profit, from one hand and between the real sectors such as GDP, foreign interest rates, government revenues, government expenditures' and bank's equity effect on the other hand. Different statistical exercises including stability tests for structural stability of the model and causality experiments were conducted. Granger causality tests were performed on all variables, and bank equities, variable was found to Granger cause banks profit, GDP Granger causes bank profit indirectly through bank equities. The other variables were insignificant at acceptable levels. The statistical findings indicated that the predictability of these models is highly accurate and could be applied to similar countries or institutions.