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Financial Integration and Economic Growth in Europe

Author

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  • Guglielmo Maria Caporale
  • Anamaria Diana Sova
  • Robert Sova

Abstract

This study examines the impact of financial integration on economic growth in the case of 31 European countries over the period from 2000 to 2021 using dynamic panel data models. The estimation results provide evidence of significant positive effects of financial integration on economic growth. They also suggest that the financial integration – economic growth relationship depends on country-specific characteristics such as the level of financial development and the quality of institutions. More precisely, financial integration appears to exert a greater positive influence on growth in the case of the European countries with a higher level of financial development and better institutions.

Suggested Citation

  • Guglielmo Maria Caporale & Anamaria Diana Sova & Robert Sova, 2023. "Financial Integration and Economic Growth in Europe," CESifo Working Paper Series 10563, CESifo.
    • Handle: RePEc:ces:ceswps:_10563
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    More about this item

    Keywords

    financial integration; economic growth; Europe; financial development; quality of institutions; dynamic panel models; GMM estimator;
    All these keywords.

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration

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