Financial development, technology, growth and performance: Evidence from the accession to the EU

Andrey Zagorchev, Geraldo Vasconcellos and Youngsoo Bae

Journal of International Financial Markets, Institutions and Money, 2011, vol. 21, issue 5, 743-759

Abstract: During the past two decades, many countries have embarked on a path of developing their financial markets, strengthening their technological base and stabilizing their economies. This paper finds that financial development and investment in information and communications technology (ICT) have significant positive impacts on GDP during macroeconomic structural reforms. We investigate eight Central and Eastern European countries that recently joined the EU. To secure macroeconomic stabilization, the countries have gone through privatization, harmonization and adjustments of the economies based on convergence criteria. Since some instruments are chosen based on the decision of the countries to satisfy the EU economic requirements, this unique experience along with a GMM methodology mitigates potential endogeneity problems. We estimate systems of simultaneous equations by GMM methods for GDP per capita, financial development and investment in telecommunications technology (TEL). We also find that financial development positively impacts TEL and that TEL weakly contributes to financial development.

Keywords: Financial development; Technology; GDP; Economic growth; Macroeconomics (search for similar items in EconPapers)
JEL-codes: C30 F36 F40 G15 K00 O33 (search for similar items in EconPapers)
Date: 2011
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (31)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1042443111000357
Full text for ScienceDirect subscribers only

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:eee:intfin:v:21:y:2011:i:5:p:743-759

DOI: 10.1016/j.intfin.2011.05.005

Access Statistics for this article

Journal of International Financial Markets, Institutions and Money is currently edited by I. Mathur and C. J. Neely

More articles in Journal of International Financial Markets, Institutions and Money from Elsevier
Bibliographic data for series maintained by Catherine Liu ().