Does Financial Development Enhance Economic Growth? The Case of Turkic Countries Finansal Gelişme Ekonomik Büyümeyi Artırır mı? Türk Cumhuriyetleri Örneği


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Çetenak E. H., Haykır Ö., Çetenak Ö.

Bilig, vol.2023, no.106, pp.55-76, 2023 (SSCI) identifier

  • Publication Type: Article / Article
  • Volume: 2023 Issue: 106
  • Publication Date: 2023
  • Doi Number: 10.12995/bilig.10603
  • Journal Name: Bilig
  • Journal Indexes: Social Sciences Citation Index (SSCI), Scopus, International Bibliography of Social Sciences, Index Islamicus, Linguistic Bibliography, Linguistics & Language Behavior Abstracts, MLA - Modern Language Association Database, Political Science Complete, Sociological abstracts, Worldwide Political Science Abstracts, TR DİZİN (ULAKBİM)
  • Page Numbers: pp.55-76
  • Keywords: economic growth, Financial development, financial institu-tions, financial markets, Turkic countries
  • Ankara Haci Bayram Veli University Affiliated: No

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 develop-ment. The index shows the level of development of financial institutions and financial markets in terms of depth, access, and efficiency. The annual percent-age 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.