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Development And Efficiency Of Banking And Economic Growth In Central And Eastern Europe


  • Curak, Marijana

    () (University of Split)

  • Poposki, Klime

    (University St. Kliment Ohridski)

  • Ecim, Tanja

    (University of Split)


In an endogenous growth framework, well developed and efficient financial system can promote economic growth. A number of empirical studies confirmed this hypothesis. Since the financial systems of transition countries are dominated by banks, in this paper we analyze the importance of banking industry for economic growth using methods of panel data analysis for 15 Central and Eastern European countries in the period from 1992 to 2006. Using variables that measure both quantitative and qualitative aspects of financial intermediation, our findings support the view that the effectiveness of banking industry is more important than its size per se for the economic growth in the Central and Eastern European countries.

Suggested Citation

  • Curak, Marijana & Poposki, Klime & Ecim, Tanja, 2009. "Development And Efficiency Of Banking And Economic Growth In Central And Eastern Europe," Papers 2009/32, Osterreichish-Rumanischer Akademischer Verein.
  • Handle: RePEc:ris:sphedp:2009_032

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    banking; financial intermediation; endogenous growth; panel; Central and Eastern Europe;

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance

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