Financial Market Development and Economic Growth. New or Old Nexus in the Euro Area?

Abstract The debate about the influence of financial market development on economic growth has been ongoing for more than a century. Since Schumpeter [1912] wrote about the happenings on Lombard Street there has been growing interest in the way financial market development affects economic activity and growth. As development issues have deepened, inquiry into the finance-growth nexus has also grown, with recent research focusing on various aspects of financial crisis and developments in the BRICS economies. This study investigates the influence of financial market development on the higher growth of BRICS as compared to non-BRICS counterparts. The research utilizes the Generalised Method of Moments and an extended endogenous growth model to estimate the influence of a set of financial market indicators. We find that higher private sector levels of credit and financial depth in the BRICS economies contributed to the economic growth of those economies.

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FINANCIAL MARKET DEVELOPMENT AND ECONOMIC GROWTH: EVIDENCE FROM ASEAN AND CEE REGION

Polish Journal of Management Studies ◽

10.17512/pjms.2021.23.2.29 ◽

2021 ◽

Vol 23 (2) ◽

pp. 481-494

Author(s):

Budi Setiawan ◽

Adil Saleem ◽

Robert Jeyakumar Nathan ◽

Zoltan Zeman ◽

Robert Magda ◽

...

Keyword(s):

Economic Growth ◽

Financial Market ◽

Market Development ◽

Financial Market Development

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Role of International Financial Integration on Financial Market Development of Euro Area Countries

International Journal of Science and Management Studies (IJSMS) ◽

10.51386/25815946/ijsms-v2i4p110 ◽

2019 ◽

pp. 91-100

Author(s):

Irfan Alam

Keyword(s):

Financial Market ◽

Euro Area ◽

Financial Integration ◽

Price Volatility ◽

Share Price ◽

Market Development ◽

International Financial Integration ◽

Financial Market Development ◽

The Impact

The aim of this paper is to investigate the role of international financial integration into financial market development of Euro area countries. Annual dataset from 1998 to 2014 by using multiple regression method. The study focuses on financial integration on determining the impact on financial market development. Overall results confirming the significant positive and negative effect of international financial integration (Stock traded& share price and stock turnover ratio, respectively) while insignificant positive andnegative effect of financial integration (financial assets and liabilities and share price volatility, respectively) on financial market development. The finding provides strong evidence of achieving higher financial market development due to the drivers of financial integration.

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Financial Development and Economic Growth: Analysis of Approaches to the Problem

Ideas and Ideals ◽

10.17212/2075-0862-2020-12.4.2-251-266 ◽

2020 ◽

Vol 12 (4-2) ◽

pp. 251-266

Author(s):

Alexander Novikov ◽

◽

Irina Novikova ◽

Keyword(s):

Economic Growth ◽

Financial Development ◽

Financial Market ◽

Market Development ◽

Methodological Framework ◽

Review Of The Literature ◽

Financial Market Development ◽

Points Of View ◽

The Impact ◽

The Relationship

The article deals with debatable questions about the relationship between economic growth and financial development. Both foreign and Russian authors have opposite points of view on the relationship between economic growth and financial development. The article states that financial development for developing countries is a factor of economic growth. The authors give a review of the literature proving the influence of financial development and its mechanism – the financial market – on economic growth. To illustrate this conclusion, they analyze the research aimed at studying the theoretical aspects of assessing the ratio of the level of financial market development and economic growth. The authors also investigate the formation of a methodological framework for assessing the impact of the level of financial market development on economic growth; identify the methods to quantitatively measure the level of financial market development and economic growth. The article analyzes the recommendations to develop measures to enhance the significance of financial market for economic growth of the country.

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