Investigation of Relationship between Financial and Economic Development in the EU Countries

Deltuvaitė, Vilma; Sinevičienė, Lina

doi:10.1016/s2212-5671(14)00700-x

Cited by 18 publications

(13 citation statements)

References 20 publications

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“…A similar observation is made by Kar et al (2011) in Middle East and North Africa (MENA) and missing linkage linked to the different country-specific infrastructural foundations with different profound scales of development. Deltuvaitė and Sinevičienė's (2014) findings add to this.…”

Section: Literature Reviewmentioning

confidence: 53%

“…In the literature, a large number of studies have reviewed the symmetric growth-finance association and reported confounding results or missing relationship (Atindehou et al, 2005;Deltuvaitė & Sinevičienė, 2014;Kar et al, 2011;Kinuthia & Murshed, 2015;Klobodu & Adams, 2016;Ujunwa & Pius, 2010). Others reported significant financegrowth relationship (Adeniyi et al, 2015;Batuo et al, 2018;Jalil & Feridun, 2011;Kinuthia & Murshed, 2015;Levine, 1997;Nyasha & Odhiambo, 2017;Odhiambo, 2009aOdhiambo, , 2009bRousseau & Vuthipadadorn, 2005;Sobiech, 2019) and imply that the debate on the contributions by finance to growth is still open.…”

Section: Introductionmentioning

confidence: 99%

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The Asymmetric Influence of Financial Development on Economic Growth in Kenya: Evidence From NARDL

et al. 2020

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This study analyzed the asymmetric effects of financial development on economic growth using a model augmented with inflation and government expenditure asymmetries to inform model specification. The research question used entails, Do their asymmetry changes significantly influence growth? Using the nonlinear auto-regressive distributive lag (NARDL), the most significant results posit that positive shocks in financial development in the short run and its negative shocks in the long run increase and decrease economic growth, respectively. Regarding inflation, its positive (negative) shocks in both runs, respectively, reduce (increase) economic growth. In comparison, positive shocks in financial development that spur growth in the short run and negative shocks in financial development (government expenditure) that increase (reduce) growth are the most domineering effects as the rest of the shocks insignificantly affect growth. Results clearly demonstrate to an environment steered by stable and sustainable inflation that regulated government expenditure and comprehensive financial system deepening would positively cause economic growth. Therefore, appropriate policies that favor low inflation and reduced government spending, expansion of feasibly reformed financial institutions, capital accumulation, and increased resource mobilization should be instituted if real growth is to positively happen.

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Section: Literature Reviewmentioning

confidence: 53%

Section: Introductionmentioning

confidence: 99%

The Asymmetric Influence of Financial Development on Economic Growth in Kenya: Evidence From NARDL

et al. 2020

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“…The results are ambiguous, since they differ from indicator to indicator. A paper by Deltuvaite and Sineviciene (2014) investigated the relationship between financial development and economic growth in different clusters of EU countries. Their results are mixed leading to the conclusion that there is no clear consensus on the relation between variables.…”

Section: Literature Reviewmentioning

confidence: 99%

Stock Market Development and Economic Growth: Evidence from the European Union

Kajurová¹,

Rozmahel²

2017

Acta Univ. Agric. Silvic. Mendelianae Brun.

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The paper examines the causal relation between the stock markets development and economic growth in the EU countries. In particular, the nature and causality direction is investigated. Panel data techniques including cointegration tests, vector error correction models and Granger causality tests were applied to indicate the nature and direction of causality. Long‑run effects of the economic growth upon stock market development was detected in the sample of the Euro area member countries. In addition, the short‑run mutual relations between growth and stock markets were indicated in that country‑sample. In the non‑Euro area countries, only short‑run impact of the stock market development upon economic growth was found. The empirical findings bring up implications for macroeconomic stabilization and development policies. The indicated relations also play a role in predicting economic growth and stock markets’ development.

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“…A chunk of economic issues, both theoretical and empirical, revolves directly or indirectly around the growth phenomenon, and even the greater portion of these are concentrated on studying the relationships between financial development and economic growth and development (Levine 1997, Rousseau and Wachtel 1998, Levine, Loayza and Beck 2000, George et al 2013, Deltuvaite and Sineviciene 2014. Microeconomic studies are not carried out in isolation, they are carried out for macro purposes and macro policy making.…”

Section: Introductionmentioning

confidence: 99%

Finance – Growth Nexus in Nigeria: Fragility and Development Effects

Ajogbeje

2016

ESJ

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The study investigates the effects of financial fragility and financial development on economic growth in Nigeria between 1982 and 2012. The augumented dickey fuller (ADF) unit root test and the Johanson cointegration tests were respectively used to establish the stationarity and long run properties of the variables. The results show that financial development, proxy by credit to private sector as a percentage of GDP has a positive significant effects on output, as expected. As regards the fragility effects, the result revealed that the effect of financial volatility on economic growth is negative. Financial fragility was refined in the contexts of unsound banking system and unstable financial market, which were proxy by interest rate volatility and exchange rate volatility respectively, thus have negative significant effects on output. It is thus recommended that policy maker's efforts aimed at increasing growth should work more on developing the financial sector and dampening the volatile nature of financial series. The pairwise granger causality result also reveals that there is a unidirectional causality running from financial fragility to gross capital formation.

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Investigation of Relationship between Financial and Economic Development in the EU Countries

Cited by 18 publications

References 20 publications

The Asymmetric Influence of Financial Development on Economic Growth in Kenya: Evidence From NARDL

The Asymmetric Influence of Financial Development on Economic Growth in Kenya: Evidence From NARDL

Stock Market Development and Economic Growth: Evidence from the European Union

Finance – Growth Nexus in Nigeria: Fragility and Development Effects

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