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Financial Development, Bank Efficiency, and Economic Growth Across the Mediterranean

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Economic and Social Development of the Southern and Eastern Mediterranean Countries

Abstract

We examine the relationship between FD and economic growth in the SEMC and the EU-MED in 1985–2009 using several variables, taking into account the effects of both quantity and quality. Credit to the private sector and bank deposits are negatively associated with growth, which suggests deficiencies in credit allocation as well as weak financial regulation and supervision. Stock market size and liquidity play a role in growth, especially when accounting for the quality of institutions. Investments, whether domestic or foreign, contribute to economic growth. Stronger institutions and low inflation are growth factors. Initial GDP has a persistently and significantly negative impact on growth, which confirms the catching-up hypothesis.

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Author information

Authors and Affiliations

  1. Centre for European Policy Studies (CEPS), Brussels, Belgium

    Rym Ayadi & Willem Pieter De Groen

  2. National Bank of Belgium, Brussels, Belgium

    Emrah Arbak

  3. ESSEC, University of Tunis, Tunis, Tunisia

    Sami Ben Naceur

  4. Economic Research Forum, Cairo, Egypt

    Sami Ben Naceur

Authors
  1. Rym Ayadi
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  2. Emrah Arbak
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  3. Sami Ben Naceur
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  4. Willem Pieter De Groen
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Correspondence to Rym Ayadi .

Editor information

Editors and Affiliations

  1. (CEPS), Centre for European Policy Studies, Brussels, Belgium

    Rym Ayadi

  2. Center for Social and Economic Research (CASE), Warsaw, Poland

    Marek Dabrowski

  3. CASE - Center for Social and Economic Research, Warsaw, Poland

    Luc De Wulf

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Ayadi, R., Arbak, E., Naceur, S.B., De Groen, W.P. (2015). Financial Development, Bank Efficiency, and Economic Growth Across the Mediterranean. In: Ayadi, R., Dabrowski, M., De Wulf, L. (eds) Economic and Social Development of the Southern and Eastern Mediterranean Countries. Springer, Cham. https://doi.org/10.1007/978-3-319-11122-3_14

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