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European Banking Integration and Sustainable Economic Growth

Ovidiu Stoica (), Otilia-Roxana Oprea (), Ionel Bostan (), Carmen Sandu Toderașcu () and Cristina Mihaela Lazăr ()
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Otilia-Roxana Oprea: Faculty of Economics and Business Administration, Alexandru Ioan Cuza University, 22 Carol I, 700505 Iasi, Romania
Ionel Bostan: Faculty of Law and Administrative Sciences, Ştefan cel Mare University, Universitatii 13, 720229 Suceava, Romania
Carmen Sandu Toderașcu: Faculty of Economics and Business Administration, Alexandru Ioan Cuza University, 22 Carol I, 700505 Iasi, Romania
Cristina Mihaela Lazăr: Faculty of Economic Sciences, Ovidius University, 58 Ion Vodă, 900527 Constanta, Romania

Sustainability, 2020, vol. 12, issue 3, 1-19

Abstract: Sustainable economic growth is considered a fundamental problem due to the effects that can be felt on the society as a whole, along with the phenomenon of banking integration that can influence the development of a country’s economy. This research aims to investigate the impact of banking market integration on sustainable economic growth in EU countries, especially in the context of financial integration, a good consolidation of the banking market is needed. We also identified the main factors by which the development of the banking market influences economic growth. The analysis was carried out for the period 2004–2018 in EU countries as a sample. According to the results obtained, we can say that European banking integration has a positive influence and has many benefits on the growth and sustainable development of the economy. The main factors by which banking integration significantly and positively favors economic growth are convergence of asset returns, convergence of interest rates, cross-border lending to the non-banking sector, foreign assets and foreign liabilities), the ratio of international banking activities, the ratio between assets and GDP, and the net interest margin (only when maintaining a low level) with some differences between the pre-crisis and the post-crisis period, the countries in the Euro Zone outside the euro, and the new EU member states and the old EU member states.

Keywords: growth; sustainability; banking integration; convergence (search for similar items in EconPapers)
JEL-codes: Q Q0 Q2 Q3 Q5 Q56 O13 (search for similar items in EconPapers)
Date: 2020
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