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Capital Market Development And Economic Growth: The Case Of Romania

Author

Listed:
  • Flavia Barna

    (West University of Timişoara, Romania)

  • Petru-Ovidiu Mura

    (West University of Timişoara, Romania)

Abstract

Capital markets play an important role in the economic development of emerging capital markets. Well functioning markets insure that both corporations and investors get or receive fair prices for their securities. In the literature on endogenous growth, the link between capital markets development and economic growth has received much attention. This paper examines the correlation between capital market development and economic growth in Romania using a regression function. The results show that the capital market development is positively correlated with economic growth, with feed-back effect, but the strongest link is from economic growth to capital market, suggesting that financial development follows economic growth, economic growth determining financial institutions to change and develop.

Suggested Citation

  • Flavia Barna & Petru-Ovidiu Mura, 2010. "Capital Market Development And Economic Growth: The Case Of Romania," Annals of the University of Petrosani, Economics, University of Petrosani, Romania, vol. 10(2), pages 31-42.
    • Handle: RePEc:pet:annals:v:10:y:2010:i:2:p:31-42
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    References listed on IDEAS

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    1. Naceur, Samy Ben & Ghazouani, Samir, 2007. "Stock markets, banks, and economic growth: Empirical evidence from the MENA region," Research in International Business and Finance, Elsevier, vol. 21(2), pages 297-315, June.
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    Cited by:

    1. Okey O. Ovat, 2014. "Assessing the Extent of Development of the Nigerian Capital Market: A Comparative Analysis," International Journal of Financial Economics, Research Academy of Social Sciences, vol. 2(2), pages 73-81.
    2. Muhammad Azam & Muhammad Haseeb & Aznita Binti Samsi & Jimoh Olajide Raji, 2016. "Stock Market Development and Economic Growth: Evidences from Asia-4 Countries," International Journal of Economics and Financial Issues, Econjournals, vol. 6(3), pages 1200-1208.
    3. Catalin Drob, 2014. "Recent Evolution Of The Capital Markets In Romania," Studies and Scientific Researches. Economics Edition, "Vasile Alecsandri" University of Bacau, Faculty of Economic Sciences, issue 20.

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    More about this item

    Keywords

    capital market; economic growth; BET Index; quarterly PIB; time series; correlation;
    All these keywords.

    JEL classification:

    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • D53 - Microeconomics - - General Equilibrium and Disequilibrium - - - Financial Markets
    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy

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