Do Efficient Banking Sectors Accelerate Economic Growth in Transition Countries

Koivu, Tuuli

doi:10.2139/ssrn.1015710

Cited by 97 publications

(72 citation statements)

References 35 publications

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“…They found that domestic credit, which includes private credit as well as credit to central and local governments, was more important for growth than private credit. Koivu (2004) supports these results applying a fixed effects regression analysis on 25 transition countries. These results are different from most theoretical and empirical literature because the above mentioned estimations use data on domestic credit.…”

Section: Impact Of Lending Practices On the Private And The Public Sesupporting

confidence: 76%

“…These changes in the competitive structure of the banking industry may induce efficiency gains in the whole sector as argued by most of the discussion on efficiency (Goldberg 2004, 5). Koivu (2004) found evidence that increasing financial sector efficiency measured by interest margins has growth-enhancing effects on economies in transition. She applied cross-country and time-series regressions on nine CEE countries over .…”

Section: Efficiency Spillovers On the Whole Financial Sectormentioning

confidence: 99%

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Foreign Direct Investment in the Financial Sector: The Engine of Growth for Central and Eastern Europe?

2005

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Section: Impact Of Lending Practices On the Private And The Public Sesupporting

confidence: 76%

Section: Efficiency Spillovers On the Whole Financial Sectormentioning

confidence: 99%

Foreign Direct Investment in the Financial Sector: The Engine of Growth for Central and Eastern Europe?

2005

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“…Among the existing papers focusing on transition countries, Koivu (2002) investigated the effects of the banking sector on economic growth with special focus on almost all CEE transition countries by using data for the period 1993-2000. The paper found that the margin between lending and deposit interest rates negatively and significantly affected growth, but the size of the financial sector had no effect.…”

Section: Literature Review Of Stock Market and Economic Growthmentioning

confidence: 99%

An Empirical Analysis of Stock Market Development and Economic Growth: The Case of Macedonia

Lazarov

Miteva-Kacarski

Nikoloski

2016

South East European Journal of Economics and Business

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“…In such an environment, there was a relatively weak contribution of the financial sector to economic growth in South-Eastern Europe over 1993-2001[Mehl, Winkler 2003]. Koivu [2002] using panel data from 25 transition countries over the 1993-2000 period supported the conclusion that bank credit to the private sector does not contribute to economic growth, also due to soft budget constraints (a concept introduced by Kornai [1979]) and banking crises in those economies. The lack of a positive and significant relationship between financial development and economic growth in 13 CEE countries for 1994-1999 was proven likewise by Dawson [2003].…”

Section: Review Of Literaturementioning

confidence: 99%

Development of Financial Systems in 1995–2014: A Factor Analysis

Iwanicz-Drozdowska

Smaga

2017

Contemporary Trends and Challenges in Finance

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Summary:The aim of the research was to analyse financial system development patterns for both 19 post-communist European economies and 21 non-post-communist (advanced) countries over the 1995-2014 period. The use of a factor analysis allowed for identifying two unobservable factors which account for most of the variance of the 9 observed variables characteristic of the economic and financial development, the banking sector's standing and the structure of the financial sector. Identified factors represent the financial system development and growth of the banking sector, but their roles differ among the analysed groups of countries. The banking sector is a significant driving force of development in both cases. Yet, in advanced economies, a certain role is also played by the stock market, which is not the case for post-communist countries. The results show that there is higher homogeneity in the financial system development patterns in post-communist countries, while the roles of both factors are more heterogeneous among advanced economies. Lastly, the results provide evidence that the global financial crisis did not cause a permanent structural change in these two processes.Keywords: post-communist countries, financial system, factor analysis. We are grateful to dr Marek Karwański for helpful discussions and valuable comments to the earlier version of the paper. All remaining errors are our own. The earlier version of the paper was published as . 48Małgorzata Iwanicz-Drozdowska, Paweł Smaga Streszczenie: Celem badania była analiza rozwoju systemów finansowych 19 europejskich krajów postkomunistycznych i 21 krajów wysokorozwiniętych w okresie 1995-2014. Zastosowanie analizy czynnikowej pozwoliło na zidentyfikowanie dwóch nieobserwowalnych czynników, które odpowiadają za większość wariancji 9 zmiennych charakterystycznych dla rozwoju gospodarki, systemu finansowego oraz kondycji sektora bankowego i struktury systemu finansowego. Pierwszy czynnik obejmuje ogólny rozwój systemu finansowego, a drugi rolę sektora bankowego. Rola poszczególnych czynników jest zróżnicowana w badanych grupach krajów. O ile sektor bankowy jest znaczącą siłą napędową rozwoju w obu grupach, to w krajach wysokorozwiniętych istotną rolę odgrywa także rozwój rynku giełdowego, co z kolei nie jest obserwowalne w krajach postkomunistycznych. Wyniki wskazują na istnienie większej jednorodności w kierunkach rozwoju systemów finansowych wśród krajów postkomunistycznych, natomiast rola wspomnianych czynników jest bardziej zróżnicowana w gospodarkach wysokorozwiniętych. Analiza czynnikowa prowadzi także do wniosku, że globalny kryzys finansowy nie spowodował trwałych zmian strukturalnych w obu procesach.Słowa kluczowe: kraje postkomunistyczne, system finansowy, analiza czynnikowa.

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Do Efficient Banking Sectors Accelerate Economic Growth in Transition Countries

Cited by 97 publications

References 35 publications

Foreign Direct Investment in the Financial Sector: The Engine of Growth for Central and Eastern Europe?

Foreign Direct Investment in the Financial Sector: The Engine of Growth for Central and Eastern Europe?

An Empirical Analysis of Stock Market Development and Economic Growth: The Case of Macedonia

Development of Financial Systems in 1995–2014: A Factor Analysis

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