Banks, Stock Markets, and Growth Relationships in the EU28 Countries

Georgantopoulos, Andreas G.; Filos, Ioannis; Poutos, Evangelos I.

doi:10.4018/978-1-5225-6114-9.ch006

Cited by 1 publication

(1 citation statement)

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“…They concluded that the structure of financial system matters in economic development in developed countries. Georgantopoulos, Filos, and Poutos (2018) investigated the impact of banks and stock markets on economic growth in 28 EU countries, and provided evidence to support stock marked‐led growth hypothesis but not for bank‐credit‐led growth hypothesis.…”

Section: Structure and Level Of Financial Development And Finance‐growth Nexusmentioning

confidence: 99%

What matters for finance‐growth nexus? A critical survey of macroeconomic stability, institutions, financial and economic development

Ehigiamusoe

Samsurijan

2020

Int. J Fin Econ

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This paper analyses the variables that moderate the impact of financial development on economic growth based on theoretical and empirical evidences. We show that financial and economic development, institutions and macroeconomic stability are the fundamental variables that moderate the finance‐growth nexus. Specifically, higher levels of financial and economic development, institutional quality and macroeconomic stability promote the impact of financial development on economic growth, while lower levels of these variables could have the opposite effect. We also show that too much finance is deleterious to economic growth, suggesting the existence of a threshold level of financial development beyond which further finance inhibits, rather than enhances growth. The economic implication of this study is that a stable macroeconomic environment, higher level of institutional quality, optimum financial and economic development are necessary conditions for finance to accelerate growth. Hence, countries that want to promote economic growth through the financial sector should give adequate priority to these variables.

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Section: Structure and Level Of Financial Development And Finance‐growth Nexusmentioning

confidence: 99%