ECONOMETRIC ESTIMATION OF FACTORS’S INFLUENCE ON THE SIZE OF THE FINANCIAL SECTOR
Share
Metrics
ECONOMETRIC ESTIMATION OF FACTORS’S INFLUENCE ON THE SIZE OF THE FINANCIAL SECTOR
Annotation
PII
S042473880000525-6-1
Publication type
Article
Status
Published
Authors
Edition
Pages
40-49
Abstract
Currently there is no consensus, among the researchers and experts about how are the size, structure of the financial sector and economic growth interconnected. Financial sector, as an essential component of the national economy includes all the financial relationships between the various actors in the process of formation, distribution and use of financial resources. The main objectives of any economic policy are stability, economic growth, while sustainable development is closely connected with the financial sector’s ability to successfully carry out their functions. Then, the main purpose of the financial system in the economy is to ensure long-term economic growth through effective financing of the economy. The authors analyze the effect of different rates of economic growth on the size of financial sector, based on regression analysis of panel cross-country annual data from 2000 to 2015 in the developed (USA, Canada, Germany, France) and developing countries (BRICS) with the help of a software package Stata. Based on the research conclusions of the tendency and the strength of influence of such factors as the economic growth of per capita consumption, the value of the discount rate, the rate ratio of issued bank loans and deposits, the share of investment in fixed assets in GDP and inflation on the size of the financial sector. The results may be used by scientists and economists forecasting the development of the national economy and individual financial and non-financial sectors of the economy. The results may be of interest to financial institutions and economists who study the same or similar issues.
Keywords
finance, growth factors, regression analysis, per capita consumption, fixed investment, rate of inflation, national stock exchange, developing countries
Date of publication
01.04.2017
Number of purchasers
0
Views
105
1

## References

Anzoategui D., Maria S., Martinez P., Rocha R.R. (2010). Bank Competition in the Middle East and Northern Africa Region. Review of Middle East Economics and Finance 6, 2, Article 2, 11–27.
Belke A., Haskamp U., Setzer R. (2015). Regional Bank Efficiency and Its Effect on Regional Growth in “Normal” and “Bad” Times. Ruhr Economic Papers No. 586, 4–31.
Black J. (2000). Economics. Dictionary. М.: INFRA-M, Ves’ Mir (in Russian).
Fungáčová Z., Solanko L., Weill L. (2010). Market Power in the Russian Banking Industry. Bank of Finland Discussion Papers No. 3, 1–27.
Lakštutienė A. (2008) Correlation of the Indicators of the Financial System and Gross Domestic Product in European Union Countries. Engineering Economics 3, 58, 7–13.
Lucas R.E. Jr. (1988). On the Mechanics of Economic Development. Journal of Monetary Economics 22, 1, 3–42.
Maznyak V.М. (2001). Bank Equity and Risk. Finansovye issledovanija 3. Available at: http://finis.rsue.ru/2001_N3/ maznyk.htm (accessed: April 2016, in Russian).
Nayak G. (2012). Why Credit Deposit Ratio is a Key Measure. The Economic Times. Available at: http://articles. economictimes.indiatimes.com (accessed: April 2016).
Ponomarenko S. (2004). Financial Sector and the Costs of Inflation in Countries with Transition Economies. М.: IEPP (in Russian).
Robinson J. (1956). The Generalization of the General Theory. The Rate of Interest and other Essays. London: MacMillan, 86.
Ross S. (2016). How Does a High Discount Rate Affect the Economy? Available at: http://www.investopedia.com (accessed: April 2016).
Schumpeter J.A. (1934). The Theory of Economic Development. (1912 translated by Opie R.) Cambridge: Harvard University Press, 137–148.
Shuaib I.M., Ndidi D.E. (2015). Capital Formation: Impact on the Economic Development of Nigeria 1960–2013. European Journal of Business, Economics and Accountancy 3, 23–24.
Simiona D., Stanciua M. (2015) Correlation Analysis between Structure Financial System and Economic Growth in Romania. Emerging Markets Queries in Finance and Business 32, 1332–1341.
Zhuang J., Gunatilake H., Niimi Y., Khan M.E., Jiang Y., Hasan R., Khor N., Lagman-Martin A.S., Bracey P., Huang B. (2009) Financial Sector Development, Economic Growth, and Poverty Reduction: A Literature Review. ADB Economics. Working Paper Series 173, 2–9.