The Effect Of Financial Development On Growth In Countries Joining The EU After 2004: A Panel Data Analysis

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Arıç K. H., Erkekoğlu H.

Revista Economică, Journal of Economic-Financial Theory and Practice, vol.66, no.3, pp.60-71, 2014 (Peer-Reviewed Journal)


In this study, the effect of financial development on the growth in 12 countries joining the EU after 2004 was analysed by using data of the period 2004- 2012. Panel data was used as the analysis method. According to the results of the analysis, domestic credits to private sector as % of GDP negatively affect economic growth. Market capitalization of listed companies as % of GDP is statistically insignificant affect on growth. However, M2 have a positive effect on growth and interest rate has negative impact on growth. Also 2009 year has a negative impact on economic growth. This situation can be described by 2009 global financial crisis.

Key words: Financial development, economic growth, European Union, panel data Jel classification: C01, C23, G23, O47, O52, R11