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Capital Market Development And Economic Growth: The Case Of Romania

Flavia Barna and Petru-Ovidiu Mura ()
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Petru-Ovidiu Mura: West University of Timişoara, Romania

Annals of the University of Petrosani, Economics, 2010, vol. 10, issue 2, 31-42

Abstract: Capital markets play an important role in the economic development of emerging capital markets. Well functioning markets insure that both corporations and investors get or receive fair prices for their securities. In the literature on endogenous growth, the link between capital markets development and economic growth has received much attention. This paper examines the correlation between capital market development and economic growth in Romania using a regression function. The results show that the capital market development is positively correlated with economic growth, with feed-back effect, but the strongest link is from economic growth to capital market, suggesting that financial development follows economic growth, economic growth determining financial institutions to change and develop.

Keywords: capital market; economic growth; BET Index; quarterly PIB; time series; correlation (search for similar items in EconPapers)
JEL-codes: D53 E44 O16 O40 (search for similar items in EconPapers)
Date: 2010
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