Does Financial Development Enhance Economic Growth? The Case of Turkic Countries

Authors : Emin Hüseyin ÇETENAK, Özkan HAYKIR, Özlem ÖZTÜRK ÇETENAK

Pages : 55-76

Doi:10.12995/bilig.10603

View : 218 | Download : 172

Publication Date : 2023-07-28

Article Type : Research Paper

Abstract :In this study, we investigate whether financial development enhances economic growth in Turkic countries, namely, Azerbaijan, Kazakhstan, Kyrgyzstan, and Türkiye from 1995 to 2017. The financial development index is obtained from the International Monetary Fund to proxy for the level of financial development. The index shows the level of development of financial institutions and financial markets in terms of depth, access, and efficiency. The annual percentage growth rate of GDP per capita based on constant local currency is taken as an indicator of economic growth. The main result of the analysis shows that there is a positive relationship between financial development and economic growth. The result is robust using random effect regression, adding inflation, and including Banking Z Score. However, the main impact can be seen in the financial institution instead of the financial market proxy. The results support the supply-leading hypothesis for the economies of four Turkic countries.
Keywords : Finansal gelişme, ekonomik büyüme, Türk Cumhuriyetleri, finansal kurumlar, finansal piyasalar