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Economic development versus the growing importance of the financial sector: Global insight

Author

Listed:
  • Marek Maciejewski

    (Cracow University of Economics, Kraków, Poland)

  • Agnieszka Głodowska

    (Cracow University of Economics, Kraków, Poland)

Abstract

Objective: The objective of the article is to show the relationship between the growing role of the financial sector and economic development in the context of the 4 Industrial Revolution (4IR). Research Design & Methods: The article uses linear ordering based on the standardized sums method. It allowed for the construction of a synthetic indicator of the financialisation of the economy. The values of this indicator were compared with the GDP growth rate of selected countries. Findings: Studies have shown that, for the countries with the highest economic development level, there is no reason to say that too high level of development in the financial sector slows down their economic growth. Instead, it turned out that the development of the financial sector, which is detrimental to economic growth, occurs in countries in transition and those with an average economic development level. There the level of financialisation of the economy is lower. Contribution & Value Added: The study was carried out on a large group of countries with different economic development levels, making it possible not only to draw general conclusions but also to address individual countries’ specificities.

Suggested Citation

  • Marek Maciejewski & Agnieszka Głodowska, 2020. "Economic development versus the growing importance of the financial sector: Global insight," International Entrepreneurship Review, Centre for Strategic and International Entrepreneurship at the Cracow University of Economics., vol. 6(3), pages 79-92.
    • Handle: RePEc:krk:ientre:v:6:y:2020:i:3:p:79-92
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    File URL: https://ier.uek.krakow.pl/index.php/pm/article/view/2006/2100
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    Cited by:

    1. Zahid Yousaf & Magdalena Radulescu & Crenguta Ileana Sinisi & Luminita Serbanescu & Loredana Maria Păunescu, 2021. "Towards Sustainable Digital Innovation of SMEs from the Developing Countries in the Context of the Digital Economy and Frugal Environment," Sustainability, MDPI, vol. 13(10), pages 1-28, May.
    2. Shengnan Lv & Zeshui Xu & Xuecheng Fan & Yong Qin & Marinko Skare, 2023. "The mean reversion/persistence of financial cycles: Empirical evidence for 24 countries worldwide," Equilibrium. Quarterly Journal of Economics and Economic Policy, Institute of Economic Research, vol. 18(1), pages 11-47, March.
    3. Głodowska Agnieszka & Wach Krzysztof & Knežević Blaženka, 2022. "Pros and Cons of e-Learning in Economics and Business in Central and Eastern Europe: Cross-country Empirical Investigation," Business Systems Research, Sciendo, vol. 13(2), pages 28-44, December.

    More about this item

    JEL classification:

    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General

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