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Financial Development and Economic Growth: Turkey Case

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  • Alperen AGCA

    (Institution of Social Sciences Hacettepe University)

Abstract

In this study, the relationship between financial development and economic growth has been handled in the light of causality linkage through the concerning variables in Turkey during the period 1984-2013. Four major variables for financial development have been used to evaluate this relationship. Moreover, investments are thought to be an effective variable to complete the causality between financial development and economic growth. To this end, the relationship has been observed by adding the investment variable to the model with the financial development indicators. Granger causality tests have been applied by using Johansen?s co-integration and vector error-correction methodology. Additionally, to ensure the effects and directions of causality impulse-response tests have been employed. Although there are several results and contributions for the direction of causality among the literature, this study reveals that there are causality from financial development to economic growth with significant variables. Growth, on the other hand, causes to financial development by only one important variable. Banking and financial regulations are crucial for a solid growth and reliable financial markets. The politics regarding to financial markets had to be applied substantially.

Suggested Citation

  • Alperen AGCA, 2015. "Financial Development and Economic Growth: Turkey Case," Proceedings of International Academic Conferences 1003857, International Institute of Social and Economic Sciences.
    • Handle: RePEc:sek:iacpro:1003857
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    Cited by:

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    3. Mohammed Ahmed, Abdullahi, 2019. "China’s Bilateral Currency Swap Agreement: Strategic Move to Foster Political and Financial Hegemony," MPRA Paper 109879, University Library of Munich, Germany, revised 08 Oct 2019.
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    7. Okabe, Tomohito & Kam, Timothy, 2017. "Regional economic growth disparities: A political economy perspective," European Journal of Political Economy, Elsevier, vol. 46(C), pages 26-39.
    8. Akame, Afuge & Mavrotas, George, 2024. "The differential effects of foreign aid to sub-Saharan Africa," IOB Discussion Papers 2024.01, Universiteit Antwerpen, Institute of Development Policy (IOB).
    9. Matthew Harrison & Geng Xiao, 2019. "China and Special Drawing Rights—Towards a Better International Monetary System," JRFM, MDPI, vol. 12(2), pages 1-15, April.
    10. Ibrahim D. Raheem & Kazeem B. Ajide & Xuan V. Vo, 2021. "The hype of social capital in the finance‐growth nexus," Economic Notes, Banca Monte dei Paschi di Siena SpA, vol. 50(3), November.
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    13. Adam Cook & Isaac Ehrlich, 2018. "Was higher education a major channel through which the US became an economic superpower in the 20th century?," Journal of the Asia Pacific Economy, Taylor & Francis Journals, vol. 23(4), pages 515-553, October.
    14. Mukherjee, Sacchidananda & Rao, R. Kavita, 2017. "Determinants of Registration of Unincorporated Enterprises under State Value Added Tax Act in India," MPRA Paper 81236, University Library of Munich, Germany.
    15. Priniti Panday & Deanna Rackie & Maria Cornachione Kula, 2020. "The status of women and its influence on children’s well‐being: Do geography, religion and income matter? A comparative study," Development Policy Review, Overseas Development Institute, vol. 38(6), pages 766-782, November.
    16. Ahmad Mashal & Emad Ahmad & Lama Nasrawi & Anas Ghazalat, 2021. "The impact of external funding flow on Jordan’s GDP (1997-2017)," International Journal of Research in Business and Social Science (2147-4478), Center for the Strategic Studies in Business and Finance, vol. 10(3), pages 328-337, April.
    17. Odhiambo, Nicholas M, 2020. "Financial development,income inequality and carbon emissions in Sub-Saharan African countries: A panel data analysis," Working Papers 26645, University of South Africa, Department of Economics.
    18. FASUA Henry Kehinde & MAYAKI Adeolu Thompson & ADEBAYO Sunday Fatoba, 2023. "Taxation Policy and Public Economic Growth and Development in Nigeria," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 7(4), pages 463-473, April.
    19. Suchi Kapoor Malhotra & Howard White & Nina Ashley O. Dela Cruz & Ashrita Saran & John Eyers & Denny John & Ella Beveridge & Nina Blöndal, 2021. "Studies of the effectiveness of transport sector interventions in low‐ and middle‐income countries: An evidence and gap map," Campbell Systematic Reviews, John Wiley & Sons, vol. 17(4), December.
    20. Taiwo Akinlo & Dauda Olalekan Yinusa & Akintoye Victor Adejumo, 2021. "Financial development and real sector in sub-Saharan Africa," Economic Change and Restructuring, Springer, vol. 54(2), pages 417-455, May.
    21. Selamawit G. Kebede & Almas Heshmati, 2020. "Energy Use and Labor Productivity in Ethiopia: The Case of the Manufacturing Industry," Energies, MDPI, vol. 13(11), pages 1-21, May.
    22. Ozili, Peterson K & Ndah, Honour, 2022. "Impact of financial development on bank profitability," MPRA Paper 111337, University Library of Munich, Germany.

    More about this item

    Keywords

    Financial Development; Economic Growth; Turkey; Granger Causality; Error Correction Model; Co-integration;
    All these keywords.

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