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Financial System Development and Economic Growth in Transition Economies:New Empirical Evidence from the CEE and CIS Countries

Author

Listed:
  • Laura Cojocaru

    () (Bankable Frontier Associates)

  • Evangelos M. Falaris

    () (Department of Economics, University of Delaware)

  • Saul Hoffman

    () (Department of Economics, University of Delaware)

  • Jeffrey B. Miller

    () (Department of Business, Gallaudet University)

Abstract

We examine the role of financial development in economic growth in the former Communist countries of Central and Eastern Europe and the Commonwealth of Independent States during the first two decades since the beginning of transition. These countries, which had undeveloped financial systems under Communism, provide an interesting test of the relationship between financial development and growth. Our study is the broadest in terms of coverage and time period. We find that measures of financial market efficiency and competitiveness are more important than the size of the market in terms of promoting economic growth.

Suggested Citation

  • Laura Cojocaru & Evangelos M. Falaris & Saul Hoffman & Jeffrey B. Miller, 2015. "Financial System Development and Economic Growth in Transition Economies:New Empirical Evidence from the CEE and CIS Countries," Working Papers 15-04, University of Delaware, Department of Economics.
  • Handle: RePEc:dlw:wpaper:15-04
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    File URL: http://www.lerner.udel.edu/sites/default/files/ECON/PDFs/RePEc/dlw/WorkingPapers/2015/UDWP2015-04.pdf
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    References listed on IDEAS

    as
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    Citations

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    Cited by:

    1. Iwasaki, Ichiro & Kumo, Kazuhiro, 2016. "Decline and Growth in Transition Economies: A Meta-Analysis," CEI Working Paper Series 2016-9, Center for Economic Institutions, Institute of Economic Research, Hitotsubashi University.
    2. Michael A. Stemmer, 2017. "Revisiting Finance and Growth in Transition Economies - A Panel Causality Approach," Documents de travail du Centre d'Economie de la Sorbonne 17022, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.
    3. Muhammad Azam & Muhammad Haseeb & Aznita Binti Samsi & Jimoh Olajide Raji, 2016. "Stock Market Development and Economic Growth: Evidences from Asia-4 Countries," International Journal of Economics and Financial Issues, Econjournals, vol. 6(3), pages 1200-1208.
    4. Emmanuel Carré & Guillaume L’Œillet, 2017. "Une revue de la littérature récente sur le nexus finance-croissance après la crise : apports, limites et pistes de recherche," Revue d'économie financière, Association d'économie financière, vol. 0(3), pages 271-290.
    5. Moyo, Clement & Dingela, Siyasanga & Kolisi, Nwabisa & Khobai, Hlalefang & Anyikwa, Izunna, 2017. "Renewable energy consumption and unemployment in South Africa," MPRA Paper 83160, University Library of Munich, Germany.
    6. Milena Lipovina-Bozovic & Julija Cerovic Smolovic, 2016. "Evidence on Economic Growth and Financial Development in Montenegro," Management, University of Primorska, Faculty of Management Koper, vol. 11(4), pages 349-365.
    7. Dombi, Akos & Grigoriadis, Theocharis, 2017. "Ancestry, Diversity & Finance: Evidence from Transition Economies," Discussion Papers 2017/4, Free University Berlin, School of Business & Economics.
    8. repec:taf:eurjfi:v:24:y:2018:i:12:p:1047-1062 is not listed on IDEAS
    9. Marcin Grela & Aleksandra Majchrowska & Tomasz Michałek & Jakub Mućk & Agnieszka Stążka-Gawrysiak & Grzegorz Tchorek & Marcin Wagner, 2017. "Is Central and Eastern Europe converging towards the EU-15?," NBP Working Papers 264, Narodowy Bank Polski, Economic Research Department.
    10. Seven, Ünal & Yetkiner, Hakan, 2016. "Financial intermediation and economic growth: Does income matter?," Economic Systems, Elsevier, vol. 40(1), pages 39-58.
    11. Sumon Kumar Bhaumik & Ali M. Kutan & Sudipa Majumdar, 2018. "How successful are banking sector reforms in emerging market economies? Evidence from impact of monetary policy on levels and structures of firm debt in India," The European Journal of Finance, Taylor & Francis Journals, vol. 24(12), pages 1047-1062, August.
    12. Emmanuel Carré & Guillaume L'Oeillet, 2018. "The Literature on the Finance–Growth Nexus in the Aftermath of the Financial Crisis: A Review," Post-Print halshs-01746069, HAL.
    13. repec:pal:compes:v:60:y:2018:i:1:d:10.1057_s41294-018-0056-6 is not listed on IDEAS
    14. repec:seb:journl:v:15:y:2017:i:2:p:209-227 is not listed on IDEAS

    More about this item

    Keywords

    transition economies; CEE; CIS; financial sector development; economic growth;

    JEL classification:

    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • P27 - Economic Systems - - Socialist Systems and Transition Economies - - - Performance and Prospects
    • P34 - Economic Systems - - Socialist Institutions and Their Transitions - - - Finance

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