Investigating the Effect of Banking Credits on Provinces Gross Domestic Product Using Panel Data in Iran.

This study aims to estimate the influencing degree of banking credits on the provinces gross domestic product (PGDP) during 2000-2010 and to determine whether this variable has positive &significant effect on the provincial products. Based on this, in order to test the hypotheses, Panel Data method has been used & the results gained from Chow & Hausman test indicate the superiority of fixed effect method for estimating of models. This study-driven results show that first, banks credits have positive effect on the PGDP & the elasticity of production to credits is smaller than unit. Second, banks credits in agricultural, services & construction sectors have positive effect on provincial products unlike industry& mining sectors. Third, total, consumption & capital expenditures of government have had positive effect on provincial products so that the size of consumption expenditure effect is bigger than that of capital expenditure. [ABSTRACT FROM AUTHOR]