Do Technological Developments and Financial Development Promote Economic Growth: Fresh Evidence from Romania

Ijaz Ur Rehman, Muhammad Shahbaz and Phouphet Kyophilavong

MPRA Paper from University Library of Munich, Germany

Abstract: We study the relationship between financial development, technological development and economic growth in Romania. We construct aggregate indices of financial development and technological development using principal component analysis. The ARDL bounds testing approach shows the presence of cointegration between financial development, technological development and economic growth. Financial development and technological development contribute to economic growth. Moreover, financial development leads technological development which Granger causes economic growth. Our empirical evidence suggest that economic growth is driven by financial development via technological development and that, in Romania,a stable financial system and capital market can facilitate technological innovations.

Keywords: Financial development; technological development; economic growth; Romania (search for similar items in EconPapers)
JEL-codes: E00 (search for similar items in EconPapers)
Date: 2013-11-21, Revised 2013-11-29
New Economics Papers: this item is included in nep-fdg and nep-tra
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Journal Article: Do Technological Development and Financial Development Promote Economic Growth: Fresh Evidence from Romania (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:51813

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