Advanced Search
MyIDEAS: Login

Financial Development and Economic Growth in Poland in Transition: Causality Analysis

Contents:

Author Info

  • Gurgul, Henryk
  • Lach, Łukasz

Abstract

This study examines the causal relationship between economic growth and financial development in Poland on the basis of quarterly data for the period 2000 Q1–2011 Q4. In order to examine the impact of the 2008 financial crisis on the structure of financial sector-GDP links in Poland we performed the empirical research for the full period and the precrisis subsample (covering the period 2000 Q1–2008 Q3). The empirical research was performed in two variants: bank- and stock market-oriented approaches. The results obtained for the pre-crisis subsample suggest causality running from stock market development to economic growth and from economic growth to banking sector development. This implies that the direction of the causality strongly depends on which particular area of the financial sector is considered. When the crisis data was also taken into consideration the test results suggested that during the 2008 financial crisis the banking sector had a much more significant impact on economic growth than before the crisis. On the other hand, the positive causal impact of the performance of the WSE on economic growth in Poland was significant before 2008, while during the crisis significant negative shocks occurred. The empirical results for both periods examined were found to be robust to the type of control variable applied and the specification of the testing procedure, which clearly validates the major conclusions of this paper.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://mpra.ub.uni-muenchen.de/52303/
File Function: original version
Download Restriction: no

Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 52303.

as in new window
Length:
Date of creation: 2012
Date of revision:
Handle: RePEc:pra:mprapa:52303

Contact details of provider:
Postal: Schackstr. 4, D-80539 Munich, Germany
Phone: +49-(0)89-2180-2219
Fax: +49-(0)89-2180-3900
Web page: http://mpra.ub.uni-muenchen.de
More information through EDIRC

Related research

Keywords: financial development; economic growth; transition economies; Granger causality;

Other versions of this item:

Find related papers by JEL classification:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Peter C.B. Phillips, 1985. "Understanding Spurious Regressions in Econometrics," Cowles Foundation Discussion Papers 757, Cowles Foundation for Research in Economics, Yale University.
  2. repec:lje:journl:v:1:y:2007:i:1:p:1-34 is not listed on IDEAS
  3. Evans, Alun Dwyfor & Green, Christopher J & Murinde, Victor, 2002. "Human Capital and Financial Development in Economic Growth: New Evidence Using the Translog Production Function," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 7(2), pages 123-40, April.
  4. Granger, C W J, 1969. "Investigating Causal Relations by Econometric Models and Cross-Spectral Methods," Econometrica, Econometric Society, vol. 37(3), pages 424-38, July.
  5. Beck, Thorsten & Levine, Ross, 2004. "Stock markets, banks, and growth: Panel evidence," Journal of Banking & Finance, Elsevier, vol. 28(3), pages 423-442, March.
  6. Raghuram G. Rajan & Luigi Zingales, . "Financial Dependence and Growth," CRSP working papers 344, Center for Research in Security Prices, Graduate School of Business, University of Chicago.
  7. Johansen, Soren, 1995. "Likelihood-Based Inference in Cointegrated Vector Autoregressive Models," OUP Catalogue, Oxford University Press, number 9780198774501, Octomber.
  8. Demetriades, Panicos O. & Hussein, Khaled A., 1996. "Does financial development cause economic growth? Time-series evidence from 16 countries," Journal of Development Economics, Elsevier, vol. 51(2), pages 387-411, December.
  9. Hicks, J. R., 1969. "A Theory of Economic History," OUP Catalogue, Oxford University Press, number 9780198811633, Octomber.
  10. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
  11. Harb, Nasri & Al-Awad, Mouawiya, 2005. "Financial Development and Economic Growth in the Middle East," MPRA Paper 13605, University Library of Munich, Germany.
  12. repec:wop:humbsf:1995-63 is not listed on IDEAS
  13. Shan, Jordan Z & Morris, Alan G & Sun, Fiona, 2001. "Financial Development and Economic Growth: An Egg-and-Chicken Problem?," Review of International Economics, Wiley Blackwell, vol. 9(3), pages 443-54, August.
  14. Gurgul, Henryk & Lach, lukasz, 2011. "The role of coal consumption in the economic growth of the Polish economy in transition," Energy Policy, Elsevier, vol. 39(4), pages 2088-2099, April.
  15. Hyoungsoo Zang & Young Chul Kim, 2007. "Does financial development precede growth? Robinson and Lucas might be right," Applied Economics Letters, Taylor & Francis Journals, vol. 14(1), pages 15-19.
  16. Sinha, Dipendra & Macri, Joseph, 2001. "Financial development and economic growth: The case of eight Asian countries," MPRA Paper 18297, University Library of Munich, Germany.
  17. Deidda, Luca & Fattouh, Bassam, 2002. "Non-linearity between finance and growth," Economics Letters, Elsevier, vol. 74(3), pages 339-345, February.
  18. R. Scott Hacker & Abdulnasser Hatemi-J, 2006. "Tests for causality between integrated variables using asymptotic and bootstrap distributions: theory and application," Applied Economics, Taylor & Francis Journals, vol. 38(13), pages 1489-1500.
  19. J. L. Horowitz, 1995. "Bootstrap Methods In Econometrics: Theory And Numerical Performance," SFB 373 Discussion Papers 1995,63, Humboldt University of Berlin, Interdisciplinary Research Project 373: Quantification and Simulation of Economic Processes.
  20. Diks, C.G.H. & Panchenko, V., 2004. "A new statistic and practical guidelines for nonparametric Granger causality testing," CeNDEF Working Papers 04-11, Universiteit van Amsterdam, Center for Nonlinear Dynamics in Economics and Finance.
  21. Fase, M. M. G. & Abma, R. C. N., 2003. "Financial environment and economic growth in selected Asian countries," Journal of Asian Economics, Elsevier, vol. 14(1), pages 11-21, February.
  22. Donald W. K. Andrews & Moshe Buchinsky, 2000. "A Three-Step Method for Choosing the Number of Bootstrap Repetitions," Econometrica, Econometric Society, vol. 68(1), pages 23-52, January.
  23. Toda, Hiro Y. & Yamamoto, Taku, 1995. "Statistical inference in vector autoregressions with possibly integrated processes," Journal of Econometrics, Elsevier, vol. 66(1-2), pages 225-250.
  24. Luintel, Kul B. & Khan, Mosahid, 1999. "A quantitative reassessment of the finance-growth nexus: evidence from a multivariate VAR," Journal of Development Economics, Elsevier, vol. 60(2), pages 381-405, December.
  25. Shandre M. Thangavelu & Ang Beng Jiunn & James, 2004. "Financial development and economic growth in Australia: An empirical analysis," Empirical Economics, Springer, vol. 29(2), pages 247-260, 05.
  26. Sinha, Dipendra & Macri, Joseph, 2001. "Development and Economic Growth: The Case of Eight Asian Countries," Economia Internazionale / International Economics, Camera di Commercio di Genova, vol. 54(2), pages 219-234.
  27. Abu-Bader, Suleiman & Abu-Qarn, Aamer S., 2008. "Financial development and economic growth: The Egyptian experience," Journal of Policy Modeling, Elsevier, vol. 30(5), pages 887-898.
  28. Granger, C. W. J., 1988. "Some recent development in a concept of causality," Journal of Econometrics, Elsevier, vol. 39(1-2), pages 199-211.
  29. Jordan Shan, 2005. "Does financial development 'lead' economic growth? A vector auto-regression appraisal," Applied Economics, Taylor & Francis Journals, vol. 37(12), pages 1353-1367.
  30. Donny Tang, 2006. "The effect of financial development on economic growth: evidence from the APEC countries, 1981-2000," Applied Economics, Taylor & Francis Journals, vol. 38(16), pages 1889-1904.
  31. Kemal, A.R. & Qayyum, Abdul & Hanif, Muhammad N., 2004. "Financial Development and Economic Growth: Evidence from a Heterogeneous Panel of High Income Countries," MPRA Paper 10198, University Library of Munich, Germany.
  32. Granger, C. W. J. & Newbold, P., 1974. "Spurious regressions in econometrics," Journal of Econometrics, Elsevier, vol. 2(2), pages 111-120, July.
  33. Xiaming Liu & Haiyan Song & Peter Romilly, 1997. "An empirical investigation of the causal relationship between openness and economic growth in China," Applied Economics, Taylor & Francis Journals, vol. 29(12), pages 1679-1686.
  34. Jordan Shan & Jianhong Qi, 2006. "Does Financial Development 'Lead' Economic Growth? The Case of China," Annals of Economics and Finance, Society for AEF, vol. 7(1), pages 197-216, May.
  35. Gurgul, Henryk & Lach, Łukasz, 2010. "The causal link between Polish stock market and key macroeconomic aggregates," MPRA Paper 52250, University Library of Munich, Germany.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Polat, Ali & Shahbaz, Muhammad & Ur Rehman, Ijaz & Satti, Saqlain Latif, 2013. "Revisiting Linkages between Financial Development, Trade Openness and Economic Growth in South Africa: Fresh Evidence from Combined Cointegration Test," MPRA Paper 51724, University Library of Munich, Germany, revised 25 Nov 2013.
  2. Mikhail Stolbov, 2014. "How Are Interbank and Sovereign Debt Markets Linked? Evidence from 14 OECD Countries, the Euro Area and Russia," Panoeconomicus, Savez ekonomista Vojvodine, Novi Sad, Serbia, vol. 61(3), pages 331-348, June.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:52303. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ekkehart Schlicht).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.