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Examining the Relationship between Financial Development and International Trade in Croatia

Author

Listed:
  • Bilas Vlatka

    (Associate professor, Faculty of Economics and Business, University of Zagreb, Croatia)

  • Bosnjak Mile

    (Faculty of Economics and Business, University of Zagreb, Croatia)

  • Novak Ivan

    (Faculty of Economics and Business, University of Zagreb, Croatia)

Abstract

This paper examines the relationship between financial development and international trade in Croatia over the period from the first quarter of 1997 and the last quarter of 2015. The autoregressive distributed lag (ARDL) bounds testing approach to cointegration is applied to examine the long-run and short-run relationships among the series. The research hypothesis is accepted and the relationship between financial development and international trade in Croatia is established and confirmed. The research results reveal unidirectional Granger causality from financial development to international trade at the 10% significance level, and negative long-run and the positive short-run relationships between financial developments and international trade in Croatia.

Suggested Citation

  • Bilas Vlatka & Bosnjak Mile & Novak Ivan, 2017. "Examining the Relationship between Financial Development and International Trade in Croatia," South East European Journal of Economics and Business, Sciendo, vol. 12(1), pages 80-88, April.
    • Handle: RePEc:vrs:seejeb:v:12:y:2017:i:1:p:80-88:n:9
    DOI: 10.1515/jeb-2017-0009
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    References listed on IDEAS

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    Cited by:

    1. Guglielmo Maria Caporale & Anamaria Diana Sova & Robert Sova, 2023. "The short‐run and long‐run effects of trade openness on financial development: Some panel evidence for Europe," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 28(4), pages 3891-3901, October.
    2. Bošnjak Mile, 2019. "Determinants of Current Account in Cases of Serbia and Romania: Time-Varying Parameters Approach," South East European Journal of Economics and Business, Sciendo, vol. 14(1), pages 21-33, June.
    3. Ummuhabeeba Chaliyan & Mini P. Thomas, 2021. "Financial Markets, Financial Institutions and International Trade: Examining the causal links for Indian Economy," Papers 2112.01749, arXiv.org, revised Jun 2022.
    4. Caporale, Guglielmo Maria & Sova, Anamaria Diana & Sova, Robert, 2022. "The direct and indirect effects of financial development on international trade: Evidence from the CEEC-6," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 78(C).
    5. Bunje, Madinatou Yeh & Abendin, Simon & Wang, Yin, 2022. "The multidimensional effect of financial development on trade in Africa: The role of the digital economy," Telecommunications Policy, Elsevier, vol. 46(10).

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    More about this item

    Keywords

    financial development; international trade; Croatia;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • G1 - Financial Economics - - General Financial Markets
    • C01 - Mathematical and Quantitative Methods - - General - - - Econometrics

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