Article ID Journal Published Year Pages File Type
963218 Journal of International Financial Markets, Institutions and Money 2011 17 Pages PDF
Abstract
During the past two decades, many countries have embarked on a path of developing their financial markets, strengthening their technological base and stabilizing their economies. This paper finds that financial development and investment in information and communications technology (ICT) have significant positive impacts on GDP during macroeconomic structural reforms. We investigate eight Central and Eastern European countries that recently joined the EU. To secure macroeconomic stabilization, the countries have gone through privatization, harmonization and adjustments of the economies based on convergence criteria. Since some instruments are chosen based on the decision of the countries to satisfy the EU economic requirements, this unique experience along with a GMM methodology mitigates potential endogeneity problems. We estimate systems of simultaneous equations by GMM methods for GDP per capita, financial development and investment in telecommunications technology (TEL). We also find that financial development positively impacts TEL and that TEL weakly contributes to financial development.
Related Topics
Social Sciences and Humanities Economics, Econometrics and Finance Economics and Econometrics
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