Superimposing Space onto the Relationship between Financial Development and Economic Growth

Year 2020, , 895 - 907, 31.12.2020

Mustafa Erhan Bilman , Sadik Karaoğlan

https://doi.org/10.24988/ije.202035415

Abstract

We investigate the relationship between financial development (FD) and economic growth (EG) for a selected sample of 20 emerging market economies by adopting a dynamic spatial modelling framework with common factors. Annual data for the period 1996-2018 is used. Empirical findings suggest that FD affects EG negatively. Furthermore, there are negative spillovers on the EG rates of the neighboring countries which are generated by the financial sector improvements in any single emerging country. This is a striking finding that it questions the old argument that financial sector or financial market development leads always to favorable effects on economic performance. The policy suggestion that follows is that the policy makers in the sampled countries should keep the financial sectors under control by regulations so as to stabilize their EG rates. Besides, they should design economic policy measures to protect their economic performances from the negative spillovers transmitted from the neighboring emerging countries.

Keywords

Financial development, economic growth, spatial dependence, common factors

Finansal Gelişme ve Ekonomik Büyüme İlişkisine Mekân Eklenmesi

Abstract

Bu çalışma, seçilmiş 20 yükselen piyasa ekonomisinde finansal gelişme (FD) ile ekonomik büyüme (EG) arasındaki ilişkiyi, 1996-2018 dönemini kapsayan yıllık veriler kullanılarak yürütülen ortak faktörlü dinamik mekansal modelleme aracılığıyla araştırmaktadır. Ampirik analizlerden elde edilen bulgulara göre; FD, EG’yi negatif yönde etkilemektedir. Buna ek olarak, komşu ülkelerin EG’leri üzerinde, herhangi bir yükselen piyasa ekonomisindeki finans sektörü gelişmelerinin meydana getirdiği negatif bulaşma etkileri tespit edilmiştir. Bu önemli bulgu, finans sektörü veya finansal piyasa gelişiminin her zaman ekonomik performans üzerinde olumlu etkilere neden olacağı şeklindeki eski argümanı sorgulamaktadır. Bu sonuçların ışığında elde edilen politika önerisine göre, örneklemdeki ülkelerin politika yapıcılarının EG oranlarını stabilize etmek için finans sektörlerini düzenlemeler yardımıyla kontrol altında tutmaları gerekmektedir. Ayrıca, kendi ekonomik performanslarını, gelişmekte olan komşu ülkelerden gelen negatif bulaşmalardan korumak amacıyla ekonomi politikası önlemleri dizayn etmeleri de gerekmektedir.

Keywords

Finansal gelişme, ekonomik büyüme, mekansal bağımlılık, ortak faktörler

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