Title

Financial development and economic growth: evidence from transition economies

Document Type

Article

Publication details

Akimov, A, Wijeweera, A & Dollery, B 2009, 'Financial development and economic growth: evidence from transition economies', Applied Financial Economics, vol. 19, no. 12, pp. 999-1008.

Published version available from:

http://doi.org/10.1080/09603100701857880

Peer Reviewed

Peer-Reviewed

Abstract

The hypothesis that financial development promotes economic growth enjoys significant support from empirical evidence drawn from both developed and developing countries alike. However, analogous empirical evidence is still lacking for economies in transition. This article analyses the effects of financial intermediation on the growth of real GDP by employing data for 27 countries over the period of 1989 to 2004. Using an endogenous growth model and panel data analysis techniques, we estimate regressions with various proxies for financial sector development. We find that in contrast to some recent empirical work, there is a robust positive link between financial development and economic growth in transition economies.