Assessing the Financial Integration of Eastern European Countries

Özcan Karahan (), Metehan Yılgör () and Hakan Öndes ()
Additional contact information
Özcan Karahan: Bandırma Onyedi Eylül University
Metehan Yılgör: Bandırma Onyedi Eylül University
Hakan Öndes: Bandırma Onyedi Eylül University

A chapter in Economic Development and Financial Markets, 2020, pp 103-115 from Springer

Abstract: Abstract The relationship between domestic saving and investment provides important insights for the integration of national financial markets into the world capital market. In case of perfect financial integration, it is generally assumed that there should be no close relationship between national saving and investment. The aim of this study is to measure the degree of financial integration by exploring the saving-investment nexus in Eastern European countries. We employ panel cointegration and causality tests for the annual time series covering the period of 2000–2016. Empirical results show that there is a strong causality between domestic saving and investment rate by indicating the low degree of financial integration of the Eastern European countries into the world capital market. This finding also implies that Eastern European countries are not attracting enough foreign resources that serve as a stimulant to domestic investment as well as economic growth. As a policy implication, it could be asserted that policy-makers should focus on financial reforms promoting financial integration processes in order to attract enough foreign resources for economic growth.

Keywords: Financial integration; Saving and investment; Panel data models (search for similar items in EconPapers)
Date: 2020
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:conchp:978-3-030-32426-1_6

Ordering information: This item can be ordered from
http://www.springer.com/9783030324261

DOI: 10.1007/978-3-030-32426-1_6

Access Statistics for this chapter

More chapters in Contributions to Economics from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().