The nexus between banking development and economic growth in the presence of trade openness and inflation: case of Vietnam

The purpose of this research is to examine studies on the relationship between banking development and economic growth in conditions of trade openness and inflation in Vietnam by using ARDL regression estimation method on data. time series from the first quarter of 2000 to the fourth quarter of 2019. Research results have found: There is a relationship between banking development and economic growth in terms of trade openness and inflation in Vietnam.; There was an external economic shock affecting the relationship between banking development and economic growth in Vietnam in 2008. A threshold value of 32.86% was found and a threshold value of 32.86% was found. of inflation is 9.19%. With a trade openness of less than 32.86%, it shows that banking development does not contribute to economic growth in Vietnam. However, with a trade openness greater than 32.86%, it shows that banking development has a positive impact on economic growth in Vietnam. Meanwhile, with an inflation rate below 9.19%, banking development has a positive impact on economic growth through domestic credit to the private sector. And vice versa, with an inflation rate above the threshold of 9.19%, we find a positive impact of banking development on economic growth through the interest rate spread.