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Studying the «vanishing effect» of the impact of financial development on economic growth: From the cross-country to the subnational scale

Author

Listed:
  • Krinichansky, Konstantin

    (Financial University under the Government of the Russian Federation, Moscow, Russian Federation)

  • Fatkin, Andrej

    (South Ural State University (National Research University), Chelyabinsk, Russian Federation)

Abstract

The paper shows that since 2009 the economic growth of Russian regions has ceased to be positively related to the growth of financial depth. Outwardly this phenomenon is close to the «vanishing effect» of the impact of the financial development on economic growth described by P. Russo and P. Wachtel (2011). At the same time, it is suggested to link its nature not with financial «glut», but with other reasons, including the long-drawn economic crisis in Russia and the exhaustion of the raw-materials-based growth model.

Suggested Citation

  • Krinichansky, Konstantin & Fatkin, Andrej, 2018. "Studying the «vanishing effect» of the impact of financial development on economic growth: From the cross-country to the subnational scale," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 51, pages 33-57.
    • Handle: RePEc:ris:apltrx:0348
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    More about this item

    Keywords

    financial market; financial systems; economic development; Russia’s regions;
    All these keywords.

    JEL classification:

    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • R58 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Regional Development Planning and Policy

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