Economics at your fingertips  

Revisiting Finance and Growth in Transition Economies - A Panel Causality Approach

Michael Stemmer ()
Additional contact information
Michael Stemmer: CES - Centre d'économie de la Sorbonne - CNRS - Centre National de la Recherche Scientifique - UP1 - Université Panthéon-Sorbonne

Post-Print from HAL

Abstract: This article provides new evidence on the relationship between financial development and economic growth in 15 Eastern European countries between 1994 and 2014. The analysis employs a panel Granger causality framework that is based on seemingly unrelated regression systems and Wald tests with country-specific bootstrap critical values. By relying on several financial development indicators, we find that finance primarily follows GDP per capita in transition economies, supporting a demand-driven hypothesis. In contrast, financial development in the form of financial monetization and credit extension exerts in the majority of countries a negative impact on economic growth. Moreover, a strong foreign bank presence seems to positively impact growth, presumably driven by more efficiency and prudential lending behavior.

Keywords: Economic growth; financial development; transition countries; granger causality; bootstrap (search for similar items in EconPapers)
Date: 2017-05
New Economics Papers: this item is included in nep-ets and nep-fdg
Note: View the original document on HAL open archive server:
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Published in 2017

Downloads: (external link) (application/pdf)

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:

Access Statistics for this paper

More papers in Post-Print from HAL
Bibliographic data for series maintained by CCSD ().

Page updated 2020-09-16
Handle: RePEc:hal:journl:halshs-01524462