Abstract
This study aims to investigate the relationship between a country’s financial development and its global competitiveness, specifically focusing on financial institution efficiency. The research utilizes the Global Competitiveness Index (GCI) and the Financial Market Development Index Dataset as primary sources, covering the period from 2007 to 2019. Additionally, the study seeks to analyse and compare the rankings of European Union (EU) member countries and the United Kingdom in terms of the financial markets pillar of the GCI, while also examining the disparities between the “old” GCI and GCI 4.0. This study focuses specifically on the eighth pillar of the GCI, namely “Financial market development”. It emphasizes the significance of an efficient financial sector in allocating resources, facilitating business investment, and fostering productivity. A sophisticated financial market, encompassing elements such as sound banking, regulated stock exchanges, and venture capital, plays a pivotal role in driving private sector investments. Transparency, credibility, and adequate regulation within the banking sector and financial markets are essential for protecting investors and ensuring the overall stability of the economy. By focusing on the financial institutions pillar within the EU and using the Global Competitiveness Index as a benchmark, this study can contribute valuable insights to policymakers and stakeholders, aiding them in making informed decisions to strengthen the EU’s financial sector and overall economic competitiveness.
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