THE IMPACT OF BANKING SECTOR DEVELOPMENT ON ECONOMIC GROWTH: THE CASE OF EU COUNTRIES
THE IMPACT OF BANKING SECTOR DEVELOPMENT ON ECONOMIC GROWTH: THE CASE OF EU COUNTRIES

Summary/Abstract: Using a multiple linear regression model, this paper examines the role of banking sector development on economic growth in the European Union member countries. The analysis covers a period of 21 years (2000-2020) and is based on data obtained, mainly, from the World Bank's World Development Indicators database. Our empirical results would indicate a strong and statistically significant link between the development of the banking sector and economic growth, both at the level of the EU countries and at the level of the other two groups of countries (euro area countries and non-euro EU countries). However, we obtain some different results in the case of EU countries, which are not members of the euro area. In general, our findings are in line with economic theory, but also with the results of empirical studies relevant to our topic.

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