The Relationship between Commercial, Technological, Research (Multidimensional) Complexity Indices and Financial Development

Tuba Esra Baskak

Journal of Research in Economics, Politics & Finance, 2024, vol. 9, issue 2, 306-322

Abstract: The source of economic growth is the supply-demand balance. Demand refers to consumption and supply refers to production. Producing quality products plays an important role on the production side of this balance. The country, which has a wide range of qualified products called sophisticated products, continues to grow with financial development. The concept of economic complexity refers to product diversity. This concept has taken its place in the literature by being expanded into commercial, technological, and research complexity indices as the content of the multidimensional complexity index. In this study, the relationship between multidimensional complexity indices and financial development indicators of E7 (Emerging) countries (Brazil, China, India, Indonesia, Mexico, Russia, Turkey) is analyzed with Gengenbach, Urbain, and Westerlund Cointegration Test and Mean Group Estimator applied in case of cointegration. It has been determined that these variables are cointegrated, and this relationship between the commercial and technological complexity index and financial development is significant. As a result of the analysis with the mean group estimator, it was concluded that the technological complexity index has a greater impact on financial development than the commercial and research complexity indices.

Keywords: Economic Growth; Financial Economics; Panel Data Models (search for similar items in EconPapers)
JEL-codes: C23 O40 P34 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:ahs:journl:v:9:y:2024:i:2:p:306-322

DOI: 10.30784/epfad.1428412

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