Financial development and economic growth relationship: Evidence from two-stage system gmm estimator
Authors
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Rüya Ataklı Yavuz
Çanakkale Onsekiz Mart University / Turkey
0000-0003-3147-333X
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Selahattin Bektaş
KTO Karatay University / Türkiye
0000-0001-6285-8318
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700
Abstract
This study aims to empirically investigate the relationship between financial development and economic growth using data from 31 selected countries consisting of Asian countries and Turkic Republics during the period of 2010-2020. In this study, the Two-Stage System Generalized Method of Moments estimator is utilized through dynamic panel data analysis to achieve this objective. Additionally, for comparison the same model is estimated using the Difference Generalized Method of Moments estimator. The results obtained from both estimators are presented in the study for comparison. The empirical model of the study includes three different variables: the dependent variable is the gross domestic product growth rate of the countries, while M2 money supply and private sector credits are the independent variables. According to the findings of the empirical analysis conducted for the examined period, it is determined that M2 money supply has a negative effect on economic growth, whereas the lagged value of the dependent variable and private sector credits have a positive effect on economic growth.
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Financial Development Economic Growth Panel Data AnalysisDownloads
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