Financial development, technology, growth and performance: Evidence from the accession to the EU
AbstractDuring the past two decades, many countries have embarked on a path of developing their financial markets, strengthening their technological base and stabilizing their economies. This paper finds that financial development and investment in information and communications technology (ICT) have significant positive impacts on GDP during macroeconomic structural reforms. We investigate eight Central and Eastern European countries that recently joined the EU. To secure macroeconomic stabilization, the countries have gone through privatization, harmonization and adjustments of the economies based on convergence criteria. Since some instruments are chosen based on the decision of the countries to satisfy the EU economic requirements, this unique experience along with a GMM methodology mitigates potential endogeneity problems. We estimate systems of simultaneous equations by GMM methods for GDP per capita, financial development and investment in telecommunications technology (TEL). We also find that financial development positively impacts TEL and that TEL weakly contributes to financial development.
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Bibliographic InfoArticle provided by Elsevier in its journal Journal of International Financial Markets, Institutions and Money.
Volume (Year): 21 (2011)
Issue (Month): 5 ()
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Web page: http://www.elsevier.com/locate/intfin
Financial development; Technology; GDP; Economic growth; Macroeconomics;
Find related papers by JEL classification:
- C30 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - General
- F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
- F40 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - General
- G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
- K00 - Law and Economics - - General - - - General (including Data Sources and Description)
- O33 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
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