Abstract
This study analyses the implications of the structure of financial system on country’s economic development. The aim of the paper is to analyse short-run and long-run causality between the structure of financial system and economic development. The following research methods were used: systemic, logical and comparative analysis of scientific literature; analysis of statistical data; time series model (Autoregressive Distributed Lag (ARDL) Model). The empirical results indicate positive short and long term very weak effect of financial system’s shift from bank-based to market-based on GDP per capita.
Highlights
The investigation of the relationship between the structure of financial system and economic development is important from the perspective of public policy makers
The short-run financial system’s structure index elasticity is relatively low, especially for Australia, and in most countries (Australia, India, Mexico, Malaysia and Singapore) except Argentina negative. These results indicate positive short-run effect of financial system’s shift from bank-based to market based on GDP per capita
Summarizing the research results on short-run and long-run causality between structure of financial system and economic development, the following conclusions can be made: 1. In such countries as China, Japan, the United Kingdom and Italy banks dominate as financial intermediaries, contrary trend can be observed in Brazil and India
Summary
Short-Run and Long-Run Causality Between the Structure of Financial System and Economic. Abstract ‒ This study analyses the implications of the structure of financial system on country’s economic development. The aim of the paper is to analyse short-run and long-run causality between the structure of financial system and economic development. The following research methods were used: systemic, logical and comparative analysis of scientific literature; analysis of statistical data; time series model (Autoregressive Distributed Lag (ARDL) Model). The empirical results indicate positive short and long term very weak effect of financial system’s shift from bank-based to market-based on GDP per capita. Keywords ‒ Bank-based financial system, economic development, market-based financial system, structure of financial system
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