Bonds Market and Economic Growth in Selected OIC Member Countries: Investigating the Moderating Role of Political (In)stability


The Organization of Islamic Countries (OIC) has encountered a significant decline in economic growth, which has been negatively impacted by decreasing commodity prices and ongoing regional wars. This study aims to investigate the moderating role of political (in)stability on the nexus between the bonds market and economic growth within the selected thirteen member countries in the Organization of Islamic Countries (OIC). In its methodology, this study used the panel generalized least square (GLS) and generalized method of moments (GMM) to describe and analyze the obtained data for the period from 2010 to 2019. The empirical results of the study suggested that bond finance positively contributed to and is closely associated with the economic growth and development in the investigated countries in the long run. The empirical findings suggested a significant and positive nexus between the bonds market and economic growth in the selected OIC countries. Furthermore, the findings revealed that political (in)stability has moderated the relationship between the bonds market and economic growth. Accordingly, it is highly recommended that a comprehensive financial market is established, including well-functioning financial institutions and a developed debt market, aiming to stimulate and facilitate fundraising in the economy, thereby supporting economic activities.


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