The Impact of Financial Development on Sustainable Development: An Empirical Study on the Iraqi Economy for the Period (2004-2020)

Abstract

The study aims to know the role of financial system and its developments in Iraq in order to improving sustainable development in its three dimensions (economic, social and environmental) with having been obtained quarterly data for both indicators of financial and sustainable development duration of a period of study extending from 2004-2020. Hence, the relationship was estimated by employing the statistical program (EViews), by applying the methodology of cointegration, and applying the autoregressive model which have periodic of distributed slowdowns (ARDL), and obtaining the absence of a long-term complementary relationship between indicators of financial development and sustainable development, this indicates that financial development did not contribute to achieving sustainable development. The reason behind that is the harsh conditions that the Iraqi economy experienced at the security and political level during that period, on the other hand, the study proofed the existence of a long-term complementary relationship between financial development and the economic dimension which represented by the indicator of the ratio of credit granted to the private sector then to the gross domestic product, this change that takes place in financial development adapts with the credit granted for a period of 50 days only