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The Interplay between Digitalization, Education and Financial Development: A European Case Study

Author

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  • Alexandra Horobet

    (Department of International Business and Economics, Bucharest University of Economic Studies, 010374 Bucharest, Romania)

  • Irina Mnohoghitnei

    (Department of International Business and Economics, Bucharest University of Economic Studies, 010374 Bucharest, Romania
    The paper was produced when the author worked at the Bank of England. However, any views expressed in this paper are solely of the author’s and cannot be taken to represent those of the Bank of England or to state Bank of England policy. This paper should therefore not be reported as representing the views of the Bank of England.)

  • Emanuela Marinela Luminita Zlatea

    (Department of International Business and Economics, Bucharest University of Economic Studies, 010374 Bucharest, Romania)

  • Lucian Belascu

    (Department of Management, Marketing and Business Administration, “Lucian Blaga” University of Sibiu, 550324 Sibiu, Romania)

Abstract

The paper explores the relationship between education, digitalization, and financial development between 1996 and 2019 with the aim of showcasing the differences between developed and emerging economies in Europe. We use a Bayesian VAR framework that includes variables related to education, digitalization, and financial development, as well as several endogenous variables to control for differences between countries in terms of nominal GDP growth, unemployment rate, and trade openness. Our findings clearly demonstrate the dynamic interdependence between financial development—including its two main components, financial institutions, and financial markets, digitalization, and education. Furthermore, we find that education is a leading variable in the financial development–education–digitalization nexus, whereas financial development and digitalization are laggard variables. These findings open possibilities for influencing joint policies on digitalization, education, and financial development, particularly in emerging European countries.

Suggested Citation

  • Alexandra Horobet & Irina Mnohoghitnei & Emanuela Marinela Luminita Zlatea & Lucian Belascu, 2022. "The Interplay between Digitalization, Education and Financial Development: A European Case Study," JRFM, MDPI, vol. 15(3), pages 1-23, March.
    • Handle: RePEc:gam:jjrfmx:v:15:y:2022:i:3:p:135-:d:769185
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