The Impact of Financial Sector Development and Sophistication on Sustainable Economic Growth

Abstract

The drivers of economic growth and development are among the most important issues explored by economic theory. Sustainability of economic development was previously linked by various economic schools of thought to natural resources (agriculture, land, minerals, metals etc.), labor force (including skills, productivity, and education), entrepreneurship or technology and innovation. Capital was later introduced by classical economic theory as the key element. Without significant capital accumulation, all other production factors remain idle. The value added of the production process is a result of the existence, the accessibility and the cost of capital. Therefore, the development and the sophistication of the financial sector has gradually become very important for any nation interested in sustainable growth. This paper investigates the impact of financial sector development, sophistication and performance on economic growth based on a panel regression methodology. We found statistically significant results that confirm the importance of this connection and that are very consistent with economic theory and previous relevant articles and studies.

European Banking Integration and Sustainable Economic Growth

“…According to the relationship between banking integration and sustainable economic growth, banks that have an integrated and sustainable business strategy system may have the opportunity to develop products and services whose mission is to meet the requirements of social, economic, and environmental issues and also meet the needs of all stakeholders. Also, with the objective of finding viable business cycle solutions, identifying appropriate anti-cyclical public policies and establishing regulations in this regard, it is necessary to understand the role of the main drivers of the sustainable economic growth of a country, among which, capital formation occupies an essential place, as it leads to the increase of the welfare of the society [25]. In fact, sustainable banking brings several business benefits.…”

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The Influence of Account Officer Development on the Smoothness of Murabahah Financing Returns (Case Study at Bank Syariah Mandiri, Bandar Lampung, Indonesia)

“…In the development of the banking world, the sector of sector financing is very important for the progress of the country [1]. This is because financing is one of the most important sources of funds for any type of business, especially, the banking business is growing and entering the sharia banking business.…”